CNBC price updates: Jamie Dimon, markets and Microsoft's new initiative - (9/24/2018)

CNBC Exclusive Hi again Jeff, thank you very much Karl, yes we are here with Jamie Diamond Jamie, this is a great commitment to an area that, frankly, has gone from being a bank to an unbanked city that has just retired in the over the last five years, fifteen million dollars. a network that 330 banks have closed in the last ten years, why not? Yeah, well, you know, with regulatory reform and tax reform where you now say twenty billion dollars is going to a lot of cities, obviously, Philadelphia is the seventh largest brand in the United States, that's not including that.

Its largest suburb is called New York and you know, we and we like to be part of a community. We are already here in investment banking, commercial banking and private banking. Retail is a gap, so we will open 50 branches, 20 percent will be in LMI. neighborhoods neighborhoods like this and when we come in we bring the full force of JP Morgan, which is philanthropic money, but to really help people like entrepreneurs, the colored funds are affordable housing units and we enjoy it, it's good for business and with the time we are investing for the long term, we never take it out of something, we talk about the multiplier effect and when you open a branch, people think you know what we don't need branches anymore, everything is digital, yes, but the more it works, it's incredible , so I think people I'm not thinking clearly a million people visited branches every day the type of branch is going to change the size of that branch may change they are getting smaller but there are more councils so there is a branch office mortgage loans there's a small business loan officer there's a financial advisor but your financial affairs will change, but a million people, even the average millennial, visit you about three times a quarter, so for me, the question of brands Don't forget that they will change, but you should still serve your customer the way you do.

I want to be served, not the way I want to serve you, because you know we've rolled out all these new products too, like finding the only online bank. Maybe I mention this because many people feel that 10 years ago one of the problems was education, the borrower, the child, or they didn't know enough about what to do. You said there was literally someone there to help and teach. Yeah, well, that makes a difference compared to, say, 10 years ago. Yes, I told people here when If you go to these LMI neighborhoods, you try something special, but we were going to implement a lot of financial education tools, we ask you to invest, we will implement a self-advisory group and we have not yet decided on the

price

for that you can advise and think.

We already put on the screen that you can get your FICO score and we'll teach you ways that you can improve your FICO so that you can lower the cost of a bar and things like that. We have to do a better job, not just us but the United States of educating people on financial matters, from emergency funds to handling, you know, retirement accounting, so we're making it so we have to especially do that now, just things come out that hopefully our clients will enjoy, let's talk about the power of business versus the power of government the government legendarily got big deals from different banks 13 billion dollars from you Keith Blood says you pay a total of 44 thousand million Did that money go to the community and was that the way of doing things versus the specific way? you are doing well, there is this community that really improves.

I mean, some of those funds we don't really know how they're distributed and I think one day someone will look at that and that kind of past that we've moved forward with. how we do it for you, but that's how you build a community, small businesses that provide affordable housing branches and advise people, and we know that works. Cities know this city, Philadelphia, your great hometown. They think the city is doing better and better, but it separates it. or not and that's why we make a special effort in those parts of that city now there is a sense that lending nationally is slowing down.

I don't understand that about your bank. Can you give us a sense of what's happening in places that, frankly? They are unbanked and if there is a resurgence that can really change the situation for you, so one important thing is that these things work when you do it with civil society and the government, okay, they don't work, we are together so we have You see this all over the world when mayors of non-profit companies work together, you can get people jobs, you put them on the train to get them jobs and it really works, but in the United States, the United States, the economy is quite strong and it's growing at 3% it's been like that for a couple of quarters and it looks like that way there's no big bumps so let me continue and so in lending there's a little bit of a reduction in lending in the mid market, We don't know exactly why large corporations.

Of course, public bond

markets

could accommodate customers. I think you know. We know there's an effect that through tax reform and corporations or whatever money they need to borrow less, it's hard to understand how to alleviate it, but what that really means. If you were to say look at job growth, getting people back to work, it's pretty good now, last week you told CNBC it's not a, don't call it a trade war, call it a trade skirmish, obviously you've said there could be at least times maybe a slowdown or at least in the psyche because of any kind of trade war, how do you feel about what I said at the racetrack?

Twenty billion dollars in tariffs in itself is a small attack if not achieved. paid as a tax in the United States, many people do other things well, they have made supply lines, but the twenty trillion dollar economy, so that is negative, the really negative thing is not that it is consistency of trust if people investment begins to reduce, people begin to move the supply. The chains we've seen already move

markets

a bit, so the fear of the skirmish turning into a war, which we don't really think is a good way to go wrong, could easily offset some of the benefits that they get.

I've seen it in regulatory reform and tax reform. I won't talk about regular for me? Yes, Marian Lake recently said that a fabulous CFO we haven't really seen genuine regulation that made her happy, but there have been so many things that there has been a change in attitude. No, yeah, I think when I travel with CEOs from other industries, logistics, steel pipe manufacturing, they've all seen it, we've seen real changes in regulation for us, they don't really have a long list of things they want to do. . regulatory change for smaller banks, which we fully support to make it a little easier for them, reduced to burn them, but it has nothing to do with the larger banks.

I think the public knows that we're not asking to scrap Dodd-Frank, we're just people, looking, calibrating, getting rid of duplication, looking at things that hurt the mortgage market or this type of market so that we can improve growth and do it in a way safe. to the old days just recalibrating remember there were two thousand rules, it was like one or two was a lot and they were done in haste and people show their recklessness and look at the cost-benefit, you know what makes sense, what doesn't, everyone they keep the system safer I remember the growth a stronger economy also makes the financial system safer now you just mentioned that there are no bumps in the rates we have a Federal Reserve meeting to be held this week the differential that the intention to use, you know, like the typical The logic that people say means you can't make as much money and if we can't lend as much, yeah, then I'm going to say you know the potholes, the homes in good shape, the people who goes back to work, fights, clients say five doors are fine.

Companies point out that tax reform continues to be a benefit. We don't have the extreme leverage that we didn't have. Oh, and all the loans have been pretty good. Opening a newspaper any week of any month generates tons of friction and it's increasing. Brexit QE Turkey Argentina Oh, and we don't know the full effect of those things, so yes, we're keeping an eye on that, but it may not derail the economy. I'm going to see separate the two. I still think these are all things that should contribute to the strength of its balance sheet. We have not seen.

We have European banks that are really on the run, so to speak. Why isn't JPMorgan making big giveaways? the weakness of the rest of the world, well we do it, we are in every country and we are constantly growing and we do it country by country, more bankers, systems, people and all the support, risk, legal credit compliance, so our participation in Europe has increased considerably. and we're just doing to add people and add branches and you know, the basics, man, three yards and a cloud of dust, okay, when I hear things, I think you should get a higher

price

, dirty, vulnerable, for the good from Evans, you're selling it.

Twelve times the next bookings We have been in this game for a long time if for your financial growth with the money made every day you open the door, why don't they value you as if you are a blessing to the company? That's a question you're going to ask. I have to answer that their banks are still under regulatory political restrictions and we have just gone through the crisis. I think a lot of people as investors buy are always a little worried, but they're right, worrying about very good returns on capital. We are growing up. I know when a cycle could obviously affect the bank, but we will manage it during that cycle just as we did during the last one.

Well, when I think about it, I think you must be there buying shares every day for the company. You have chosen the path of buying back shares, but I still own many shares that you have owned for the last ten years. Its share count is not going down enough. When will it start to return to the level it really isn't at? door supply I don't remember the exact number, but our share counts down like fifteen percent, yes, but we are doing six versus ten years ago, two, three, five, yes, yes, well, there is someone who has been issued over time, but since I did it.

It's been going down, but if you want to see something, I would rather spend that money and not buy back shares, doing this, so growing our business is much better for the economy right now, we don't have much of a choice, but over time. I would really prefer not to buy back shares, you know, it would make sense for companies to do that. I also don't buy this argument that it's bad, buying back shares is simply giving them back to you, an investor, who then redistributes them to take better advantage of your redistribution. of capital that should be redeployed if a company can't use it, but my goal is always to grow our business, which we are doing well now. 500 branches.

We are now in all major cities for investment banking, middle market banking, etc. been growing overseas, but think about bankers and people and things like that, so that's my p2p preparation, you invest, you know how to build products and services, so you'll see a lot more than that in the next 12 months when you think in this and I'm very proud of what you're doing in my hometown, but I say, well, Apple, from pure capitalist, you know, Jamie? We are shareholders, we should get that money. There's no real instant reward here in two three, no, it's not true, I mean, first of all, you have to be careful with accounting, but when we build a branch, okay, and we put in a million, I don't know, We want to give the numbers publicly, we put capital in the branch, but five years later that branch.

We could earn by contributing to the profits with a million dollars a year, so you know, the schedule of those new cities is a little more complicated than when we open a branch in the city where, but again, we already serve 60 million of homes, we want to serve 70 million. we want to incorporate all the products and services we have, so there is a financial reward, it just doesn't happen overnight, but I don't worry about that. I just explained to people like you that okay, the NPV is very good and it could be negative the first year, you know, maybe you fail by the third year and then some unfortunate swamp or JPMorgan depositors we won't get the rate, when Will you start paying more to your CDs and your depositors when rates go down?

It went down like that when the rates went down to zero the banks didn't do it, so the rate started going up, they didn't pass it. I think now that you're asleep you'll have other options, money market funds, etc., but I think now as rates go up the next 25, the next 25, you're going to see what we call beta, you know how much is going to carry over, it's going to go up and it's going to go up. and it will go up, well, that's going toreduce profitability, no, I wouldn't worry. It's not really because we're getting or earning deposits and the difference you keep between your cost of funds and your pain will be pretty much the same Jamie you're talking about with the Politan, just like the politicians did in 1964. about a war on poverty, that corporations seem to be doing a better job, you mentioned it in the big deals in, say, 2013, when Associate Attorney General Tony West was behind the bank, that was you, you're on the defensive , is playing offense. and trying to change poverty in this country, do you feel you can do better in government?

No, I think I feel you. I think government and business have to do it together and it works at the local level. We see it in Detroit. in new orleans we see it in chicago we see it in los angeles you see it in philadelphia with great ideas and most of the things you talk about affordable housing skills commercial development audra is not a democrat she is a republican but I think business and government together you can achieve it. You can't do without business and business can't do without government. We know that the government is obviously going to play a role both in terms of regulation and licensing and things like that, and while the United States is the most prosperous nation in the world, planet, we really need to focus on these issues about income inequality, infrastructure, the opioid crisis, the lack of education, the state of Zinna. schools lead to good jobs Jamie, yes you know how you sound when you say these things, you sound like a politician, I'm a patriot, okay, but if you're a patriot, that's generalizing now, we didn't know if there is a Democrat. a Republican friend ran for president he was a World War II patron well I'm a banker I'm not running I just think it's very important that we have good policies and that we should focus on good policies and all the time and you know , as you know I don't mind talking about good policies, discuss them and participate in the way JPMorgan can, so if you are in other areas or other couples they will do a better job than us, they have much more knowledge, but in this type of areas we can really help communities, they are good business skills, ever transferable to government, although I think some are, yes, I mean administration, management, leadership, organization, but that does not mean that a CEO will translate into a good politician, you know, politicians have a whole different skill set and you know how to relate to people and understand empathy, etc., but that doesn't mean I would never say that people can or can't, Some have done it, most don't say never, they say never again.

It takes me back to the dial. I would never say never for someone else. I wouldn't say that a CEO can't be a good president. Do you think it's too soon? And President Trump was a CEO. So just Mir Mir Kenny Philadelphia, that's something I wouldn't say. Don't say he was frowned upon, but it wouldn't be credible ten years ago, when bankers considered him antithetical to democracy, even thanks to President Obama. What's changed so much that you're now welcoming communities that were solid Democratic areas than Democratic areas? which I think they really hated banks, it's good to be welcome, but just so you know, we never stopped seeing mayors, governors, presidents, prime ministers, they said it even though even people who didn't like us because we always said that it's not about Are we doing a good job or legitimate complaints that we should handle?

What should we do to make things better for people? That's why we never stopped doing it, but it's good that we did it, you know, when people like, yeah, okay, I want to talk about country, you've gone on record that we know that the best military education system exists, you know the best educated, the best and the worst, okay we are failing the kids in the inner city schools, half of them don't graduate like in the poor neighborhoods and a lot of the kids don't get the skills that they need to have a job and that's the feeling that we should sound the alarm about it, but we don't and I don't know why, well, I don't know, what can you? do beyond what you already did, what we are doing with a huge amount of skills, so what we do in skills we go to local schools, like now we work with a Guttman in New York to train and my wife did this to train children to be tellers $36,000 a year twelve thousand medical and pension benefits children like jobs and that is the first step, then they can move up they can become bankers and live in a large part of our branch, we are tellers and many of the regional The manager told us so we could do it ourselves, but we also help the local schools.

Well, it's a high school. Well, they are apprenticeships, whether it's a community college with money, but it's not just us. All companies need jobs locally. They need special training. it has to be done, the low rate should be a national point $1.5 trillion in student loans 23 percent default last year supposed to be 40 percent by 2023 I know Marion Lake said look, that's not really a problem for a bank, but what about for a country? a big problem, you know we've lent goodness to all government loans the way it should and bad loans are bad, whether it's mortgages that you make or businesses, one of the things you have to do is have discipline around to the capital so that getting a return Bridget nowhere bad schools that don't work are bad Eleni new money people care is a mistake so the student Lenny was a tremendous amount that has been made in the last seven years and the people It's having a hard time paying it back.

Everything is owned by the government, so taxpayers are going to lose hundreds of billions of dollars, but it's not good because what we're seeing today is that on other loans and mortgages, these kids are having a hard time paying it back. obtain a mortgage credit card. How hard it is to get a credit card is affecting the economy, it's not like the mortgage crisis, it's a trillion three or a trillion four, so I wouldn't call it statistical, it's just unfortunate, okay, let's go back to international for a second, you talked about the idea. of the tariff so far they have a skirmish, but at what point would it be a war and at what point should we worry that it is really going overboard?

You know, it worries me and I just don't know. I mean, I think China has been very predictable in retaliating and I think the market was expecting tit-for-tat retaliation. I think they're waiting for NAFTA to pass, it could get worse from here and I really don't think so. I don't know what I expect him to do. I hope that they sit down and have rational conversations and that we have both NAFTA, which we should do because Canada, Mexico, good neighbors of ours, I'm going to Mexico at the end of this week and with China and I don't.

I don't know what the closed door conversations are anymore, so I don't really know if I urge them. I think we should try to improve again. The president raised very, very, very good topics. To this conclusion, we are only talking about the boats of the process. I hope your process works. I just think it's a riskier way. The president said the problem with banker Jamie Dimon running for president is that he doesn't have the intelligence to teach him and he is a bad public speaker. A nervous mess that doesn't sound like cooperation, but how did you fix that?

I mean, I'm sure in the last 10 days you fixed it. I haven't talked to the president, yeah, so and, but Mike, in my case, I made a mistake. I shouldn't have laughed, yeah, like that. in which some of you were mentioned on television, but I want to focus on the politics, so my opinion is that let's just focus on the politics. He shouldn't take action and make jokes at anyone's expense. Do you think I would put this in the case of, say, the London Whale, where you said it was the stupidest thing to want us, we used the most stupid and embarrassing situation I've ever been a part of.

It's right up there with the line and the net, no, no, I've said a lot of stupid things in my life, but London, well, let's buy some real money because what I'm thinking is that the things you're saying make sense. Common thing we haven't heard from bankers, we've heard from bankers being on the defensive for a decade. you're really saying this is how public private partnerships keep these neighborhoods from getting better as the schools are so much better and we change our country, you change it city by city, you're trying but again you have a lot of guests on TV, what you ask most about them what they are doing a lot of these companies are doing things like this, not only is there JP Morgan, but all of these companies are part of the BRT, but we actually put out a brochure on job skills, they are all doing something and everyone is doing a lot of diversity, the other things were falling behind other countries that we have seen, I think that in total we are falling.

I think bad politics is the reason we have grown at 2% in the last ten years and no more, and that 2% and the American public should know that 20% growth in 10 years is half of what should have been, China is going to surpass us. I doubt it, okay, this country has been blessed with things that go far beyond those schools and the good part that is university is reversed. land water energy the Atlantic Pacific are the best businesses innovation but we had to sit down with a series of problems we fixed one a non-competitive tax system for business that was a bad idea we have to fix immigration inner city schools opioids we have to give it a Don's the opportunity to have a job, we have to get people back to having job skills, we should double the Earned Income Tax Credit and what is that, what happens.

I have one to point out your reason and we should have some type of negative income tax. doing jobs that people have because the jobs give dignity, the jobs have better social outcomes, but they have to be a living wage, so I agree with that concept when I listen to people and the Earned Income Tax Credit does that and we need to duplicate, we should duplicate. that and you have to pay more, so bad Satya Nadella, the CEO of Microsoft, you've put this group together Shantanu Narayan from Adobe bill McDermott from s AP Frankly, I've never seen anything like this and I've been doing this on the air. and for a while it has been printed over a trillion dollars in market capitalization represented by you three gentlemen sitting here and you are announcing the open data

initiative

in the cloud Satya, is this so important that you know the vision that the three of us had ?

Based on the work we're doing with a lot of customers, you know, today we talked about Coca-Cola Unilever Walmart, as all the customers were excited about this open data

initiative

. It was your real knowledge that led us to do this, and that's how we worked to put. that they have control of their own customers' data because that is the real currency. Any brand that cares deeply about continually improving their own customer data is understandable, and the three of us coming together will be critical to making them feel in control of theirs. customer data and the idea of ​​being Microsoft with Azure Dynamics, you have a certain set of customer data, Adobe, you have the experience cloud, you have a lot of marketing data, different types of data about the customer and how companies try to reach he.

In the client application, it has a lot of data and a lot of it has to do with what happens within the company and that affects external clients as well, so our client will be able to do and maybe invoice. They'll throw this thing at you that they couldn't do before once you figure out this open data thing and they can read data across all your platforms. John, there isn't a CEO in the world that doesn't want to have a single view of their customer and they have to connect their demand chain with their supply chain and do it in real time, so if you think about the consumer who is social mobile , it's geospatial, it's always on the go. buy different companies across all direct-to-consumer wholesale and retail channels and you have to make sure that the connection point with that consumer is really intimate, so these companies have to be smart companies because more and more an I and predictive analytics are going to govern and how you engage with that customer, but ultimately what you have to do is deliver, so now you'll see demand and supply chain fully integrated and that data will be shared equally between our companies so that the customer is the main benefactor of the opening. data initiative we have today and Shantanu, you just announced that Adobe is buying Marketo.

I think it was four point seven five billion. I'll try to ask him about it a few days before he wasn't ready totalk to me. but you can talk about it now, how does that move an experienced cloud and what you're trying to build there fits into this larger story? Well, I think the three of us share this vision of how we enable companies to put customers at the front of the digital journey and Satya and Bill said that getting behavioral data, getting transactional data and getting customer engagement to the front. and the center, I think it's the most important thing that companies can do to make digital actually a tailwind instead of a headwind, which Marketo does.

Adding to our experience cloud offerings is the ability to create this unified profile for all customers, and what every customer will tell you today is that they want an engaging experience with whoever they're doing business with, whether it's financial services or automotive. , be it retail and Adobe focused much more on b2c customers, but the same requirements that were valid for b2c customers are now valid for b2b customers and that is what Marketo offers; In reality, they are a group of senior executives created from sa P who are now you. I know you run Marketo, so is it a closed party?

Are Amazon, Google Salesforce welcome to this initiative? How does it work from here now that you know you have it very clear? The name itself should say it all. It is an open data initiative. some technologies, names, all kinds of things, the spirit here is not about us, it's about really unlocking the data which is our clients' data about their own clients, but I think the fundamental thing here is trust, in others In other words, ultimately, customers will decide and comply with their customers' own trust in them will also be very key because if you think about it, one of the main considerations for everything related to customer data is privacy and regulation around privacy, so the most important thing here would be for each provider to think carefully about how to participate here and ensure that there is more trust throughout the value chain, from the end consumer to the brand and us as software providers or technology companies, so I think depending on the business models, I think the real challenge is It will be for some who want to join, but their business model probably won't allow them to join as you think it will be more difficult for Amazon or aYou'll have to ask them at Google, but I think generally what we've all been anchored on is whether we can create an architecture and an incentive system that turns the tide so that customers are in control of their own data.

I think the economy in general. You better not, so that's what we're trying to do. If I can add to that for a second, I mean what we've already demonstrated by having a common taxonomy for this customer journey, meaning what does it mean, how is a customer defined, how is it defined? demographics, how lifetime value is defined, how your interests are defined, we've actually agreed between companies even though we have some overlapping products in that space, I think it demonstrates our commitment to this open data initiative and the fact that we have clients that We're excited to build on the foundation that we have.

I think it gives us a lot of confidence that this is the right thing for companies. Bill will do anything because it will take two to get the badge today, it's the specs that are available. initiatives this year so that other companies can join. People understand what they have to do with their platforms and their software to comply. I think today's big announcement represents that Microsoft Adobe at SAP has already started this journey, so in terms of others they want to do it. join the journey, we are happy to share the reference architecture around the initiative or di.

However, I think the big story here is trust and I think Satya and Shantanu said it very well. Think of trust as the ultimate human vision. Think about the customer experience. It's the most important priority to think about the power of getting people inside these companies to focus clearly on what's happening outside of these companies, this idea of ​​the net present value of a more satisfied and loyal customer, as well as making employees more more inspired and more loyal is probably the biggest value driver we can ever think of. I mean, think about this, a five percent improvement in retention equals a ninety-five percent improvement in profits for most companies, so if we can connect that data to your consumers and give them an experience unimaginably good, what effect will that have on the revenues and profits of all the companies we care about?

A breakthrough. So, we're talking about flexibility, we're talking about efficiency and the context. Here we have a United Nations General Assembly. meeting, we have something to do with the Deputy Attorney General in Washington, maybe a change is happening there, we have a trade war between the US and China and arguably that is not the only one that is happening to what extent politics is having an impact. about product demand, your ability to project what demand will be in the market these days or whether business continues as usual. I mean, at least what we see thanks in part to the industry that we participate in is Digital technology is becoming more and more ubiquitous in all parts of the world in all sectors of the economy and therefore I think that we It is up to us, as a technology industry, to ensure that these companies are creating opportunities in all economies and in all societies, because if we think about whether politics will always be associated with the well-being of any region, any community, any country, and while technology can play a role in the ultimate success of creating surpluses that are equitably distributed, I believe these short-term obstacles will remain. works, but to me that's what I think we have a real opportunity that we're obviously sizing, but you also have the responsibility to make sure that the technologies benefit a broad spectrum and bill a German company technically.

Not being a US-based company at this time when there's a lot of trade tension between the US and Europe between the US and a lot of different countries in Asia, how does that affect the way people ve sa P when you're looking to get involved with technology and grow your business well, we obviously consider ourselves a truly global software company. I think it's a very important distinction, there's no doubt, however the tensions between, for example, some Asian countries and the United States are quite high at the moment and probably less so for a German company if you think about where the company might be located. headquarters, but in all seriousness, I think we are focused on all technology leaders being responsible for wanting things to work between countries and technology companies and right now I think everyone would benefit greatly from an environment where we let's stay focused on growth and to me, open countries are prosperous countries and if you look at the history of the world, every time a country has been open, it actually equals more trade, more opportunities for everyone, so we deliver. based on that principle, but there is no doubt that in ASEAN countries in particular I see new strength in our Shantanu business model.

It seems to me like we are entering a new era in the cloud where more mergers and acquisitions, more partnerships and initiatives like this, how can you? Look at the market because it seems like for a while big companies like yourselves were putting off doing a lot of M&A because things were expensive, but your values ​​also went up and it seems like your pace of M&A has picked up a little bit. What is your opinion? in the M&A market right now, first, I think you know the three of us were early adopters of the cloud and recognized the benefits of faster innovation that we could do in the cloud, the trust and security that comes from All this. the data is in the cloud, but I think we look at it and say to really solve fundamental customer problems, putting the onus of integration on customers to work with multiple small businesses is just not going to work and that's where I think You know, what we're trying to do with ODI is say that if our category leaders can come together and make it work, that will be extremely enabling for the companies that do it, so I think we'll see more consolidation as a result of YOU. professionals don't want to integrate small systems but depend on large companies that are innovating at a rapid pace, certainly if you're the same, yeah, I mean, I think one of the things we're really doing is reducing friction and improving agility, a One of the interesting things that Bill mentioned was, let's say, the ASEAN region, if you look at cloud AI and the open data initiative, the idea that even a small business in Indonesia can now use Sapa Adobe and Microsoft to become much more efficient is the real opportunity, so it's breaking down that barrier to be able to use the latest and greatest technology for every business in every part of the world by really working together.

It's easy to get started. It is easy to carry data from one place to another. Easy to use AI to reason about and create new experiences and it is surprising that in a sense we are commoditizing technology as an input to drive business, and in ma expect to see a greater pace. I think, first of all, if you look at all of our R&D budgets, I think most people obviously gravitate toward M&A, but the organic investments that each of us are making are by far the most big ones, of course, we're going to complement that with mergers and acquisitions where it makes sense, but I think the real thing you're seeing is growth across all of our businesses driven by fundamentally organic growth.

It's an extraordinary moment to have the three of you sitting here talking about this open data initiative. Satya Nadella, thanks for putting it all together. Shantanu narayan. by Adobe bill McDermott marco/s AAP Thank you heavens in New York back to you the market has been by virtue of the fact that we have had this record run the Dow joins the record move last week the market has I have been able to ignore almost everything what's coming out of Washington, so how do you factor this into the current calculus for investors? I think that today's event itself probably won't play a big role.

I think Washington's biggest risk is basically trade escalation. and the potential for tariffs to be implemented, we have already seen some and we need to see what happens as far as 2019 is concerned as metals have been exceptionally strong. When we look at the stock we have seen extremely healthy buyback trading that also continues to support a market along with valuations that are in no way overstated so we think it has a good context, we basically just need to see what happens with the terms because they are a risk for the 2019 figures, the market was already going to fall today as a result of these reports that China canceled the meeting for trade reasons, so we lowered that section, as I said in the Rosenstein headlines, but it has been notable that the market hasn't really cared much about the trade for more than a few hours or a day.

I mean, when you look at the earnings, the earnings so far there really haven't been, there hasn't been any material impact in terms of results and profits, so far companies are starting to talk more and more about the risk around the terrorists, but I like it again. There is no impact on earnings so far. I think that's a risk that we're basically paying a lot of attention to for 2019 and that's where I think we're seeing that the market has been pretty resilient so far and we're not working on their models. trying to take into account what happens in the midterm elections, it's only six weeks away, it's very difficult, I mean, look, phase one on tariffs has been implemented.

Part of phase 2 has been implemented. A discussion on phase 3 has been implemented. Clearly, phase 3 goes through the numbers for 2019. We believe it will be down at least five dollars in terms of EPS, if possible up to 10, but again it's very difficult to distinguish between what is reality and what is basically noise, yeah, well, we're going to have midterm elections, that's not noise, I mean. It's the reality of what's going to happen, the outcome is unknown at this point, Lindsey, so how do you take everything into account? Yes, it is definitely difficult to factor and you usually see a significant increase in volatility in the third quarter, before the midterm elections, which usually increase 34 or percent, we have not seen that this year, at Looking at many of the different groups that exist, it looks like the Democrats are going to take over the chamber, which would only result in further gridlock within Congress, which does not bode well for thegrowth and the market in the future I don't know what could be negative about the stalemate in the White House or in Washington, what could they do?

We've got the tax plan there, yeah, you've got the economy going, you know? full steam ahead, so why would stagnation be negative? Do you know what I said wrong? I don't want to say it will be negative. What I really mean is that you will not see any growth policy being pushed, there will only be infighting, not much. It is going to be done and you are right, the market generally performs well when there is stagnation in the market. I just don't expect the amount of violence to increase, if there's a stalemate, that's good, yeah, sure, and I and I think that The way Congress is positioned now and the way the election is anticipated to turn out, that is , the House with the Democrats and the Senate with the Republicans, that could change, but even if that happens, we have the growth policies in place.

We have regulations that they haven't cut, we have a tax plan going forward, so I don't see what the problem is with that. I think stagnation would be fine in terms of what happens with Rosen Stein in the future. Don't know. I really see the problems there for me, maybe this is the smoking gun that allows Trump to go after Jeff Sessions and say he worked for you, you should have known, you should have kept him in check even then, although I think it's a bit of a sell-out. . the market but the market still works I'm with you, I'm more worried about inflation, we are seeing used car prices go up while oil is not part of the core, still, the impact of higher car prices energy is reflected in everything that makes up the raw material, so that is my biggest concern, so the market seems to be taking it easy on the three point ten ten year period, approximately, the reporting window. from Bravo, your year-end goals are 3,000, we're not that far from that level right now, at what point? you start to get a little more bullish is there a search for yield until the end of the year?

Is it reassuring to know that these high-growth sectors that have driven much of this rally have taken a backseat to what seems like a bit of a backseat? Value stocks that should be rising in what is a very strong economy are finally living up to the tariffs. Industrial stocks are performing so well that we've had this price target for almost a year now and we've had to defend it on many different occasions earlier this year where there was a lot of volatility, the market is still pretty resilient. I think actually the market probably would have already been above 3000 if it weren't for the trade and the trade escalation and an old discussion about Terrier, so for us again we're really looking at 2019 right now, if you look at the consensus, it implies growth of around 10 percent, we think 11 percent is something that can be achieved, but again, that is many months of contingency on what happens with the tariffs, if we think that things start to converge . some form of resolution, I would say that the market can probably move forward at the same pace with earnings for next year, maybe five to ten percent, but if it is implemented, then I think we may need to take a pause to bring inflation and Steve is right to identify that.

I think what we're seeing right now in the U.S. in ten years is we'll see a move toward three and a quarter percent. I also think when you look at energy right now, I think the street is underinvested when it comes to energy oil prices you have BrentAbove $80 right now, the trend for Brent crude oil for the rest of the year will be increasingly higher. Get to know me personally. I am increasing my exposure to energy. I think the trend is penny-wise, but I think there's a little bit for everyone. on a day like today, so yeah, you've got some of the value names that you've been closing the gap between growth and value over the last few weeks and if you look at the market, equal weight versus cap weight, okay, equal weight has slightly better performance, but on a day like today, there's a little bit for everyone, so you've seen the tech names come back a little bit today, they're outperforming some of these value-oriented Intex, still on their way to their worst month since March, it's but, but the question is.

Do you exhaust the movement we've seen without technology coming back? It happened before, listen, it happened before again, so in July and August you may have borrowed a little bit from September. I don't think that will change the general trend of technology itself. This communication services sector is coming on Friday, so talking to a lot of hedge fund managers this weekend, they're going to lose Google, they're going to lose Facebook, they're going to lose TripAdvisor, Bava is going into the consumer discretionary sector now. how much more investments, how much more Josh can the market go up from here without technology joining me, well we have proven that it is not necessary this quarter, healthcare is up almost 12% and industrial sectors are up 11% e we made new ones. all-time highs in the Dow last week, we achieved a new record in the SP on several occasions, so it has already proven that you can have the best leading sector for three years, take a break and other sectors, as long as the earnings context be the right one. strong and the market itself is stable can take the lead and can push the index to new high levels look at retailers at multi year highs some of them all time highs who would have thought that was possible as recently as December and January?

Yes, it would be great if Amazon wasn't nine percent off a tie and Netflix was hitting new highs every day and Apple was hitting new high-end highs. Do you expect a rebound? I'm making it clear that it's okay if it's not in person. I think the biggest tone in the entire stock market right now is the alphabet, technically the setup here. I think if you get this probably 20 or 25 points higher, where really no one is down in this stock, significantly outperforming Facebook in the midst of this large-cap technology. Reduction alphabet is the name, but leave that idea aside, the big picture idea and I think this was mentioned earlier, actually, stagnation would be phenomenal.

The American public recently said in Gallup polling that they prefer to include the Republicans they want to control. At this point, even if they're Republicans, it's number one, number two, if you go back to 1950, the stock market does the third best when you have a Republican in the White House and a Democratic-controlled chamber of Congress. . It's not the best case scenario, but it's the third no, which is not a negative, but that's why we ask our experts questions about the political calculus if Rosenstein is actually fired and what the outcome could be if that could tip the outcome. in every school in America or dramatic midterm elections really good question, if you were, if you asked me in December what the biggest risk to the stock market is, I wouldn't have said recession or profits or anything from oil or anything like that, the dollar, I would have said exogenous.

Shock caused by something in Washington where we have a massive massacre on Saturday night and everyone loses confidence in the US stock market immediately. I no longer think that's the case because I think the market now expects some version of the impeachment process this fall, without saying anything. will be successful. I'm not saying Trump is in trouble. I'm just saying that the market now expects this to be the base case that we are going to have a cruel politician. Maybe Jimmy, the exogenous shock of exhaustion, is that Democrats take both. houses and I mean, at some point, when you have the carpentry workshop tomorrow, I think that would be a shock in six weeks, let's not forget that that's not where all those why questions will be asked because it's very unexpected, I want I mean, and I'm Make sure you do your polls too, everyone expects a Democratic House and a Republican Senate or electing a Republican Senate.

See if they go through an impeachment trial, in that scenario you have to stop in the Senate, if it's a Republican, it's not going anywhere if it's a Democrat. so you really have to think about the investigations that continue, although let me because the big question here is what the market has priced in. At least that's the big question for me, we have a divergence here that tells us that the market is pricing in a lot of bad things, what is that divergence? You have incredible earnings, okay, the last two quarters the earnings were just revealed and the expectations are even higher.

You mentioned that in terms of 5 to 10 percent growth at this point in the cycle. at 10 percent year-over-year growth is incredible, but the multiple has contracted since the beginning of the year, that's the way the markets say I don't know if it's tariffs I don't know if it's impeachment I don't know if it's in place where you would think that the marketing that is there and what they produce in the - you believe that the market has discounted the worst of the tariffs yes no, you believe that the market does not have to either I think wait, let me get the punchline here , okay, whatever has a price on all rates, no Joe, okay, it has a price on bad news, that's why we're... turns out no, you never got a guy, the cell phone is contracted because the rates They have increased slowly and in a short time, but they had, they were the performance. the - excuse me, the two-year and ten-year bond yields have risen and as a result, yes, you shouldn't have a multiple of the expanding stock market, you have big gains tempered by the fact that money doesn't It's as cheap as it is. it was okay so it's not rocket science wait a second it's never a thing so don't say it's mostly a thing and no no it's not it's not and by the way the season is coming of profits. no pre-announcements, okay, it sounds like you feel free to make your point, but let's do them here right now.

I'll just summarize. Look, you're gearing up for another good earnings season, third in a row. What will be fulfilled? Are we going to have expectations? "Earnings continue to rise and multiples are contracting. I don't think so, it's more likely that at this stage of the cycle multiples will start to recover, but we have a big disagreement on whether rates are fully priced." I'm not president at this time last week. I was talking about there was going to be a trilateral agreement between Mexico, Canada and the US and that's why the market rallied. We haven't gotten it done so far and I think as far as what's happening. continuing with China's implementation of these tariffs increases prices that is a problem for the American consumer that is a problem for American corporations and it is an inflationary impact but the market does not draw the economy clearly the market does not believe it will be so punitive to win 100 at this point absolutely I said I disagree I think what is discounted right now is a favorable outcome at some point Can I go back to your pre-announcement point?

Sleazy I won't agree with the facts. published an article about it last week saying that it has been the highest percentage of negative pre-announcements since the first quarter of 2016, but you can't really have it both ways, you can't say that much is discounted in the market and still so there are strong earnings that everyone has been talking about and uniformly agrees that what's going to happen this quarter is underrated, that's the point where expectations are extremely high going into the third quarter because we've had such numbers. good in the first and second quarters, and expectations are high in the third quarter just saw the confidence of the CEO Business Roundtable that came out today CEOs are worried about the tariffs that heard about it said that it only affected about 10 percent of their revenue so far micron mentioned it we are going to hear this word on the conference call significantly, we have to wait until the conference goes properly.

Macy's Office Depot. The list could go on. Are you all a threat? Smith and I grew up that, so I think what you guys, after the peers, look like CEO, so do one of two things. We're not going to say, hey, Trump is doing the wrong thing, well, they're going to put it out there and say, hey, we're going to be more cautious in the future because costs are going up. To your point, we had the last quarter of the quarter before those big profits without the tariff issues and what the markets do after the quarterly announcements what they did what you had so I want Bravo to fish in its last time and you also have to use the numbers here two hundred billion tariffs at ten percent twenty billion dollars a year going forward the sp500 I don't think it's going to appear I understand the concern about inflation so I'm not saying it's not there I'm saying it's small and thatIt's on the market, that's what I'm saying, question if it's the worst of the tariffs where they are here I heard a year but you suggested yes, I did it, I stand by it, it's halfway down what the maximum tariffs are. possible if we don't play, if you get 25 percent on another, add another 267 Okay, you're right, I'm assuming the rationality you have against you, now you have the referee on top, if we continue playing a game of, I'll see your 200 thousand millions and I will raise you others. 50 billion, that will be a problem for the market in 2005.

No, I think the tariffs are partially discounted. I don't think at all. I think if you go into phase 3, first of all, I think if they implement 25 percent. in phase 2, that in itself will probably reduce some of the numbers by 19, which I don't think is totally discounted. I think it partially is. I think the multiple is a function of rates in full agreement. However, I think trade is. It is also something that limits the rerating of the multiple, perhaps not at 2x, but at 1x. Paralyzation. Just another thing I want to mention very quickly. I totally agree with the stoppage.

I think it's positive because outside of DC last year you had a probe with This year's agenda is anti-growth, so there is stagnation. I think the market likes it. Can I ask you? This market has been driven by buybacks. If CEOs smell a slowdown in growth, do you think you'll continue to see it? The aggressive nature of the buybacks that we have seen in the last pair needs to be seen even more, so if that is what they need to increase profits, they would double down. There is no indication that they are seeing this slow control that we had.

Jamie Dimon, CEO of JPMorgan, a few moments ago with his own Jim Cramer, is an exclusive interview with CNBC in Philadelphia, this is what he said about the state of the economy. In the United States, the economy is quite strong and is growing at 3%. Now, for a couple of quarters, it seems like there are no big bumps that way, so let me continue. There's no indication of Jamie Dimon watching a lot of things and the things he watches are going to have that slowdown that you say. Well, if we have a slowdown, companies might buy a little less of their stock again.

I think the big risk is tariffs and the impact on margins. I think when you look at the economy, you're basically looking for employment, which is very solid employment in strong, you're finally seeing some wage inflation that's basically helping consumers and, in fact, there's one thing that if you look at the second quarter guidance, like most companies, we're actually talking about consumer strength, so again, I don't think earnings The picture is III, I don't think it's that clear you know expectations They have increased, but I don't think they are extreme. The terrace is negative, but on the other hand, I think you have an economist, what is the view of the house on what is the view of the house on the ten-year term and giving up and just the bonus and how small it has become? back and what do you think would really affect stock prices if not, you know, if we're not really going to worry about the curve, then what are we worried about, I'm glad you asked that question because my next question for you it was going to be: we've been here for 22 minutes and we talked about all these potential inflation risks.

I understand it, but the word that the Federal Reserve has not done. They haven't even been mentioned yet, they'll be front and center this week. I want to have a wild card, that's what fits perfectly with Josh's question, yes, so look at the Fed's rate increase. I think it's a gradual negative effect that is wearing off. Margins slowly, but we estimate that margins, for example, when you look at earnings, will not be completely affected until Phet goes up another at least 5200 bits if you look at interest expenses and debt levels. I think the multiple is a function of yields again if yields go up, say, north of three and a half, three and three quarters.

I think this becomes a problem, but let's go back there first. Our vision for the house, I would say, is probably more in line with three and a quarter to three and a half now. pension funds US pension funds corporate pension funds government pension funds are simply insatiable buyers of Treasury holdings, they are becoming very important in private equity and therefore to offset that lack of liquidity, there is a bar On the other hand, they are going crazy with trading. Which I believe is the reason for this reduction in the spread and not economic concern. Would you agree with that?

Okay, yes, I have. I had many, many PMs, they basically called me asset alligators, they told me 10-year yield at three percent, that's a buying opportunity for everyone, yes, huge groups of because when you look at what's happening abroad with Germany, Japan, where do you think it is? The question I ask people and no one knows the answer because we are in maritime rescue for the environment: where do you see the restrictive policy now? It used to be more than five percent. Clearly, that could still be there. Not where it is, so I'd say probably. three and three quarters four percent anything above that I think becomes restrictive unless new reasons emerge to suggest that growth will accelerate, but you don't have your you know your sector waiting for the tsar, what would you recommend now Are the first three places the same?

To be in the market, we have been promoting a portfolio of bars over the last few months. I'm using the same term here, basically, we still like technology because we believe that at the end of the cycle you will have no exposure. growth people pay a premium for gross car care, but at the same time, given how extreme dislocation levels have become in the market, we say don't go naked on the value side, we have value anchors , we like finance, with industries, we like energy, but I guess the reason I asked you the question is by virtue of the fact that you have those sectors: technology, finance, industrial, energy growth, cyclical, no You can worry so much about that, no, no, we don't believe that the business of the economic cycle is intact not only in the US but also globally.

I keep mentioning that tariffs and trade escalation are my biggest concern for 2019 in terms of whether we move sideways or potentially go up 10% when we look at emerging markets on a relative basis. where they are versus the US is that we think it's a great long-term opportunity, so we think that emerging markets are becoming more and more a very attractive opportunity, the risk, the reward is quite attractive, the positioning is very negative, the sentiment is very negative. with you on this, China means it's basically in recession territory. When we look at the gap between the US and China, we think there are a lot of interesting buying opportunities, it's very difficult to find the catalysts and time the catalyst, but again, a six. -month, a 12 month view, we think I definitely think the risk on that trade, well, you get more reward, but a lot more has to go right for you to get the reward now.

I don't agree, we actually worked a lot on this. We recently received some questions from customers. It turns out that when you buy emerging markets as an end as a sector as an asset class after a 20% drop, exclusive to CNBC. Hello again Jeff, thank you very much Karl, yes, we are here with Jamie Dimon Jamie. It's a big commitment to an area that, frankly, has gone from being a bank to an unbanked city. In the last five years, it took out 50 million dollars, connected 330 banks and closed in the last ten years. Why not? Yeah, you know, with regulatory reform. and a tax reform where it is now said that 20 billion dollars goes to many cities, obviously Philadelphia is the seventh largest brand in the United States that does not include its largest suburb called New York and you know that we and we like be part of a community that We are already here in investment banking, commercial banking and private banking, retail is a gap, so we will open 50 branches, 20 percent will be in LMI neighborhoods, neighborhoods like this and we have entered, we bring all the strength of JP Morgan, which is philanthropy. dollars, but to really help people like entrepreneurs, colored funds are affordable housing units and we enjoy it, it's good for business and over time and where we invest long term, we never go in and out of something.

They talked about the multiplier effect and when it opens. a branch people think you know what we don't need branches anymore everything is digital yes, but the brick the more it works is incredible so I think people are not thinking clearly. One million people visited branches every day. The branch type will change the size. the branch may change, they are getting smaller, but there are more boards, so the mortgage loan office there is a small business loan officer, there is a financial advisor, but your financial affairs change, but a million people Even the average millennial visits about three times. in a quarter, so for me the question of brands no longer forget that they will change, but you still need to serve your customer the way they want to be served, not the way I want to serve them, as you know , we have implemented all this.

New products too, like finding the product only online. I mention this because many people feel that 10 years ago one of the problems was the education of the borrower, the child or not knowing enough about what to do. someone literally there to help and teach, yeah well that makes a difference compared to 10 years ago, yeah, I told people here when you go to these LMI neighborhoods try something special, but we're going to implement a lot of financial literacy tools . we ask you to invest, we are going to implement a self-assessment group and we have not yet decided that it is expensive so you can advise and think about it, we already put it on the screen, you can get your FICO score and we will teach you. ways and you that you can improve your FICO so that you can reduce the costs of a bar and things like that, we have to do a better job, not only us, but also the United States, educating people on financial matters, from funds to emergencies to handling, you know, retirement accounting and so we're making we especially have to do that now there's just things coming out that we hope our clients enjoy.

Let's talk about the power of business versus the power of government. The government legendarily got big deals from the different banks. 13 billion dollars from you. Yes, Keith Blood says you paid a total of 44 billion. Did that money go to the community? That was the way of doing things versus the specific way you're doing it right. This really helps the community. I mean, some of those funds. we don't actually know how they were disbursed and I think someday someone should look at that and you know, I kind of passed, we've made progress in how we do it for you, but that's how you build an affordable small business lending community. housing branches that advise people and we know that works.

Cities know this city, Philadelphia, your great hometown. Let's consider that this city is getting better and better, but it is divided or not, so now we make a special effort in those parts of that city. There is a sense that lending nationally is slowing. Your bank doesn't tell me. Can you give us a sense of what's going on in places that are frankly unbanked and if there's a revival that can really move the needle so that one important thing, these things work when you do it with civil society and government, okay they don't work we're together so we've seen it all over the world when mayors and nonprofit companies work together you can get people jobs, train them to get them jobs and it really works but in the United States United the economy is pretty strong and it's growing at 3%, it's been doing that for a couple of quarters and it looks like that way there's no big bumps so let me go ahead and so lending them there's a little bit of a reduction. in mid-market lending, we don't know exactly why large corporations, of course, public bond markets could fall short of customers.

I think you know. We do know it. there is an effect that through tax reform and corporations make money they need to borrow less, it's hard to understand it, alleviate it, but what that really means, but if you look at it, you look at job growth, people go back to work , it's pretty good, now it's the last one. Last week he told CNBC that it's not a "don't call it a trade war," call it a trade skirmish. He previously said that sometimes he couldThere may be a slowdown or at least in the psyche due to any kind of trade war.

Do you think I call that a hippodrome? Twenty billion dollars in tariffs in and of themselves are a bit of an attack if they're all paid as a tax in the United States and people do other things well, they've made supply lines, but it's a twenty trillion dollar economy, so What that is negative, the really negative thing is not that it is about consistency in trust, if people start to reduce investment, people start to move the supply chains, what we have seen already moves the markets a little, so the fear that the skirmish may turn into a war, so we don't really think that's a good way to go wrong.

It could easily offset some of the benefits they've seen from regulatory reform and tax reform. I won't talk about regulating for me? Marion Lake said that would be a great thing, CFO, we haven't really seen any genuine regulation that would make her happy, but there's been so many things that there's been a change in attitude, no, yeah, so I think when I travel with CEOs from other industries, logistics, steel manufacturing pipeline. everyone has seen it, we have seen real changes in regulation for us, they don't really have a long list of things they want to do, there have been regulatory changes for the smaller banks which we fully support to make it a little easier for them to downsize. burn them, but it had nothing to do with the larger banks.

I think what I mean is that the public knows that we're not asking to get rid of Dodd-Frank, we're just looking to gauge how to get rid of duplication look at things that hurt mortgage markets or this type of market so we can improve growth and do it safely. no one is looking, you know, go back to the old days just recalibrate, remember there were 2000 rules, it was like 1 or 2 was a lot and they were done in a hurry and people show their recklessness and look at the cost-benefit, you know what Which makes sense, which doesn't keep the entire system safer, remember that the growth of the economy is stronger, it also makes the financial system safer, now that you just mentioned, no. bumps in rates, we have a Federal Reserve meeting coming up this week, the spread that would be intended to use the typical logic that people say means you can't make as much money and if we can't lend as much, then I'm going to say that there are no potholes, homes are in good shape, people are back to work, fighting, customers, sailors are fine, flag companies, tax reform is still a benefit, we don't have the extreme influence that we had and Oh, and and all the loans have been pretty good, good, good loans, so they haven't been billed, but absolutely there's friction out there, there's always friction, you open a newspaper any week of any month, there's tons of friction. and it is increasing.

Brexit QE Türkiye Argentina oh, and we don't. We know the full effect of those things, so yes, we're keeping an eye on that, but it may not derail the economy. You will see the two separated. I still think these are all things that should contribute to the strength of your balance sheet. We have seen that we have European banks that are really on the run, so to speak, why is JP Morgan not presenting the Mickey Crater given the weakness of the rest of the world? Well, we are in all countries and we are constantly growing and we do. country by country, the bankers, the systems, the people and all the support are at risk of complying with the legal credit, so our share in Europe has increased considerably and we are just doing to add people and add branches, and you know , the basics, the old three meters and a cloud of dust well, okay, when I hear three RS, I think you should get a higher price, dirty, vulnerable, for Evans' sake, you will sell it 12 times the next few years, We have been in this game for a long time if it is for your financial growth with the money earned.

Every day you open the door, why don't they value you as if the blessing were necessary? Company P, that's a question you'll have to answer. Your banks are still under political regulatory restrictions and all that, we just went through the crisis. I think that many investors always buy a little worried, but you are right, obtaining very good returns on capital. We are growing up. You know, every time a cycle comes, obviously it could affect the bank, but we'll manage through that cycle just like we did. I did well until the last one, okay, when I think about it, I think you must be there buying shares every day for the company, you have chosen a path to buy back shares, but I still know how many shares you have for the last one.

Ten years, your stock count hasn't gone down enough, when will you start to get back to the level where you really aren't, where you're absorbing the supply of doors? I don't remember the exact number, but our stock account goes down like 15 percent, yeah. but we're doing three sixes versus ten years ago three fives and yeah, well, there have been a few aired over time, but since I've been there it's been going down, but if you want to see something, I'd rather spend that. money, not buying back shares, doing this, so growing our business is much better for the economy right now, we don't have many options, but over time, I would really prefer not to buy back shares, you know, if companies did it It would make sense.

Also don't buy this argument that it's bad to buy back shares is simply to give them back to you, an investor who then redeploys them to make better use of your redeployed capital that should be redeployed if a company can't use it, but it's always better. to grow our business, which we are now doing well, 500 branches, we are now in all the major cities for investment banking, middle market banking, etc., we have been growing overseas, but think about the bankers, the people and things like that so that's my prep p2pu doesn't invest in construction products or services so you're going to see a lot more in the next 12 months when you think about this and I'm very proud of what they're doing and then my home .city, but I say it's okay, well, pure capitalist Apple, you know, Jamie?

We are shareholders, we should get that money. There's no real instant reward here two three years from now. It will take a long time. No it's not true. I mean, first of all you have to be careful with all the accounting, but when we build a branch, it's okay and we put an average. I don't know, we want to give the numbers publicly, we put capital in the branch, but five years later that branch could be earning contributing to earning a million dollars a year so you know the calendar of the new cities is a little more complicated than opening one branch in the city we are in, but again we already serve 60 million homes, we were not going to serve 70 million, we want to bring them to all the products and services that we have so that there is a financial reward, it is simply not overnight in the morning, but I don't worry about that.

I just explained to people like you that it's okay, the VPN is very good and it could be. negative the first year, you know, maybe it breaks down in the third year and then a plus of apples, a spark or JPMorgan depositors we won't get the two year rate, when will you start paying more on your CD and your deposit When do the rates arrive? It went down like that when the race was reduced to zero, the banks didn't do it, so the hug started to go up, they didn't broadcast it. I think now it looks like sleep, flight, other options, money market funds, etc., but I think now, as rates go up. until the next 25, the next 25, you will see what we call beta, you know how much will be transmitted, it will go up and go up, well, that is going to be directly profitability, no, I would worry, no, no, really, because it is we are getting or winning deposits and the difference you're keeping between your cost of funds and your pain would be pretty much the same Jamie, you're talking about politics just like politicians did in 1964, you're talking about a war.

As for poverty, that business seems to be doing a better job. You mentioned it in the big deals in, say, 2013, when Deputy Attorney General Tony West was behind the bank. To change poverty in this country, do you feel you can do better in government? No, I think I'm sorry. Yes. I think government and business have to do it together and it works at the local level. We see it in Detroit. We see it in. New Orleans, we see it in Chicago, we see it in Los Angeles, you see it in Philadelphia, with big ideas and most of the things you talk about affordable housing skills, business development, Audra, who is not a Democrat, she is a Republican, but I believe that companies and government together can achieve it.

We cannot do without business and business cannot do without government. You know the government is obviously going to play a role both in terms of regulation and licensing and things like that, and while the United States is the most prosperous nation on the planet, we really have to focus on these questions about income inequality infrastructure crisis of opioids lack of education Zinna state schools end in good jobs Jamie yeah you know how you sound when you say these things you sound like a politician I'm a patriot okay but if you're a patriot then I was generalizing now we didn't know if there was a Democrat or Republican, but he ran for president because he was a World War II patron, well, I'm a banker, I'm not running, I just think it's very important that we have good politics. and that we should focus on good policies and all that, and you know, I don't mind talking about good policies, look at them and participate in a way that JPMorgan can, so if they are in other areas or other couples they will do a better job than we have a lot more knowledge, but in these types of areas we can really help communities, they are good business skills, really transferable to government, although I think some are, yes, I mean administration, management, leadership, organization, but that doesn't mean a CEO will translate into good politicians, you know, politicians have a whole different skill set and you know how to relate to people and understand empathy, but that doesn't mean I would never say that people can or can't, some they have done. the majority have no voice, never say never again, this brings me back to the dial.

I would never say never for someone else. I wouldn't say that a CEO can't be a good president. Do you think it's too early and President Trump was a CEO so you just met him? A simple American professor in Philadelphia, that is something that would not be, I'm not saying, frowned upon but it would not be credible ten years ago, when bankers were considered the antithesis of democracy, even thanks to President Obama, what has changed so much that now you're welcoming communities that were solid Democratic areas, Democratic areas that I think really hated the Bank, it's good to be welcomed, but just so you know, we never stop seeing mayors, governors, presidents, prime ministers, Senate , although even people who don't like us because he always said it's not about whether they like us if we're doing a good job or legitimate complaints we should handle what we should do to make things better for people and that's why we never let to do it, but it's good that it was done, you know, when people like You're okay, I want to talk about the country.

You have stated that we know that the best military education system is there. The best educated, the best and the worst. Well, we're failing kids in inner-city schools. Half of them don't graduate. in poor neighborhoods and a lot of kids don't get the skills they need to have a job, so it feels like we should be sounding the alarm about it, but we don't and I don't know why. Why can't you do something beyond what you already did? What we are doing with an enormous amount of skills. So what we do in skills. We go to local schools, like we now work with the New York government to train.

If my wife did this. by the way, train kids to be tellers $36,000 a year twelve thousand medical and pension benefits kids like jobs and that's the first step, then they can move up, they could become bankers and live in a big part of our branch. The cashiers and many of the regional managers would tell us so we can do it ourselves, but we also help the local schools. Well, it's a high school. Well, it's apprenticeships, whether it's a community college with money, but it's not just us, all companies need jobs locally. they need special training so you really have to do it the logo should be a national toy $1.5 trillion in student loans 23% default list you're supposed to be 40 percent by 2023 I know Marian Lake said look, that's not It's really a problem for a bank, but what about for a country?

Its a big problem. You know, we've lent. They're all government loans, by the way, and bad loans are bad weather.Mortgages you make or companies are one of the things you have to do. is to have discipline around capital to get a return Bridget nowhere are bad schools that don't work are bad to lend money people limit here is a mistake so student Lenny was a tremendous amount of what has been done in recent years seven years the people who have difficulty paying it back are property of the government, so taxpayers are going to lose hundreds of billions of dollars, but it is not good because what we are seeing today is that in other loans and mortgages these children are having they have a hard time getting a mortgage credit card they have a hard time getting a credit card so it's affecting the economy it's not like the mortgage crisis it's a trillion three or three and four so I wouldn't call it Mitchell it's just unfortunate unfortunate Okay , let's go back to international for a second, you talked about the tower idea so far, you know you have a skirmish, but at what point would it be a war and at what point should we worry that it's really going overboard?

I know I'm worried about that and I just don't know, you know, I mean, I think China has been very predictable in retaliating and I think the market was expecting tit-for-tat retaliation. I think they're hoping NAFTA will take action, it could get worse from here and I really don't know what I expect it to do. I hope they sit down and have rational conversations and we have a NAFTA which we should do because Canada and Mexico are good neighbors of ours. I'm going to Mexico at the end of this week and with China and I don't know what the closed door talks are anymore, so I don't really know if I urge, I think we should try to recover again, the president raised very Very, very good topics , we're just talking about Rosberg concluded.

I hope his process works. I just think it's a riskier way. The president said the problem with banker Jamie Dimon running for president, no guardian application. He is intelligent and he is a bad public speaker. A nervous mess that doesn't sound like cooperation. How did you fix that? I mean, I'm sure in the last 10 days you fixed it. I haven't spoken to the president, yes, then and, but my talk. in my I made a mistake, I should have, yeah, laughs, yeah, like that where some of you were mentioned on TV, but I want to focus on the politics, so my opinion is let's focus on the politics.

I shouldn't take any chances and have jokes at anyone's expense, well do you think you'd put this in the case of, say, the London whale, where you said it was the stupidest thing to love us? We used the most stupid and embarrassing situation I have ever been a part of. It's right on the line. on the web no, no, I've said a lot of stupid things in my life, the London whale, we buy real money, the things you say are common sense, things we haven't heard from bankers, we've heard from bankers. on the defensive for a decade, you're really saying this is how public-private partnerships make these neighborhoods not better because the schools are so much better and we changed our country, you change it city by city, you're trying, but again you have many guests.

On TV you ask most of them what they are doing, a lot of these companies are doing things like this, not only is there JP Morgan, but all these companies are part of the BRT, but we actually published a brochure on job skills that everyone They are doing. something and everyone is doing a lot in diversities other things were falling behind other countries that we have seen I think that in total we are falling. I think bad politics is the reason we have grown at two percent in the last ten years and no more and that two percent and the American publisher no, 20 percent growth in 10 years is half of what which should have been, it's China that happens, I doubt it, okay, this country has been blessed with things that go far beyond those schools and your flip side is the good part.

The university is land, water, energy, the Atlantic Pacific, they are the best companies, innovation, but we had to sit down with a series of problems, we fixed one, a non-competitive tax system for companies, it was a bad idea, we have to fix immigration, inner city schools, the opioids we have. to go down as a chance to have a job we have to get people back to having job skills we should double the Earned Income Tax Credit and what everyone has to point out is the reason and we should have a negative income tax of some kind. doing jobs that people have because the jobs give dignity, the jobs have better social outcomes, but they have to be a living wage, so I agree with that concept when I listen to people and the Earned Income Tax Credit does that and we need to duplicate, we should duplicate. and you have to pay more, so whether it's Satya Nadella, the CEO of Microsoft, you've brought this group together Shantanu Narayan from Adobe Bill McDermott from sa P.

Frankly, I've never seen anything like this and I've been doing this for air and in print for a while over a trillion dollars in market capitalization represented by you three gentlemen sitting here and you are announcing the open data cloud initiative Satya, why is this so important? We are based on the work we are doing with many clients. You know, today we talked about Coca-Cola, Unilever and Walmart, as all the customers were excited about this open data initiative. It was their real knowledge that led us to do this, and that's how we work. give them control of their own customers' data because that is the real currency.

Any brand cares deeply about the continuous improvement of its own customer data, since understanding and bringing together all three parts will be essential for them to feel in control of their own data. own customer data and the idea is Microsoft with Azure Dynamics, you have a certain set of customer data, Adobe, you have the experience cloud, you have a lot of marketing data, different types of data about the customer and how companies are trying to Communicate with the client application and you will have a lot of data, much of which has to do with what is happening within the company and which affects external clients as well, for which our client will be able to do and perhaps bill.

I'll throw this thing at you that they couldn't do before once you figure out this open data thing and they can read data on all your platforms. Jon, there isn't a CEO in the world who wouldn't want to do it. They have a single view of their customers and they have to connect the change in their demand with the supply chain and do it in real time, so if you think about the consumer whose social mobile is geospatial, they are always on the go, they are We will buy different companies in all channels, direct-to-consumer wholesale and you have to make sure that the connection point with that consumer is really intimate, so these companies must be smart companies because increasingly an I and predictive analysis go to govern. and how you engage with that customer, but ultimately what you have to do is satisfy that customer, so now you'll see the demand and supply chain is fully integrated and that data will be shared evenly between our companies, so the customer is the primary benefactor of the open data initiative we announced today, and Shantanu just announced that Adobe is purchasing Marketo.

I think it was four points. seven five billion I'll try to ask you about that a few days before you weren't ready to talk to me about it, but you can talk about it now, how does that move an experienced cloud and what are you trying to build there? fits well into this broader story, I think the three of us share this vision of how we enable businesses to put customers at the front of the digital journey and Satya and Bill said that getting behavioral data, getting transactional data and getting customer engagement be the front. and center I think it's the most important thing companies can do to make digital actually a tailwind instead of a headwind.

What Marketo does is add to our experience cloud offerings the ability to create this unified profile for all customers and what every customer will tell you today is that they want an engaging experience with anyone they do business with. , whether financial services, automotive or retail, and Adobe focused much more on b2c customers, but with the same requirements that applied to b2c customers. They are now valid for b2b customers and that is what Marketo offers. It's actually a group of senior executives created as early as possible that you now know run the market. It is also a closed party.

Amazon. Google Salesforce. Welcome to this initiative. How does it work from here now that you? The guys are there today, they are very clear, but the name itself should say it all. It is an open data initiative. You, some technology, name all kinds of things. The ethos here isn't about us, it's about really unlocking the data that is our customers. data about your own customers, but I think the key thing here is trust; In other words, ultimately, customers will decide and fulfilling their own customers' trust in them will also be very key because, if you think about it, it is one of the main considerations for anything. around customer data is privacy and regulation around privacy, so the most important thing here would be for each supplier to think about how they participate here and make sure that there is more trust throughout the value chain, from the end consumer to the brand and for us as software providers or you know technology companies, so I think depending on the business models, I think the real challenge will be for some who really want to join, but their business model probably won't let them join like you.

I think it's going to be more difficult for Amazon or Google, you'll have to ask them, but I think, in general, what we've all anchored on is whether we can create an architecture, an incentive system that changes the course so that customers have control of their businesses. customers' own data. I think the economy in general will be better now, so that's what we're trying to do, John. If I can add to that for a second, I mean what we've already demonstrated by having a common taxonomy for this customer journey, meaning what that is, how do you define a customer, how do you define demographics, how lifetime value is defined, how your interests are defined, we've actually agreed between companies even though we have some overlapping products in that space, I think it demonstrates our commitment to this open data. initiative and the fact that we have customers who are excited about building on the foundation that we have, I think gives us a lot of confidence that this is the right thing for companies.

How long do you think this will take? to get the monster date, it's the specifics of this year's initiatives so that other companies can join, people understand what they have to do with their platforms and their software to comply. I think today's big announcement represents that the Microsoft Adobe NS application has already started this journey, so in terms of others who want to join the journey, we are happy to share the reference architecture around the ODI initiative. However, I think the big story here is trust and I think Satya and Shantanu said it very well, think about trust.

It is the ultimate human currency to think about the customer experience it is the most important priority to think about the power of getting the people inside these companies to focus clearly on what is happening outside these companies this idea of ​​​​the net present value of a customer more satisfied and loyal Additionally, making employees more inspired and more loyal is probably the biggest value driver we can think of. Let me think about this: a 5% improvement in retention equals a 95% improvement in profits for most companies, so if we can connect that data to your consumers and give them an unimaginably good experience, what effect will that have on the revenues and profits of all the companies we care about?

A breakthrough. Ok, we're talking about flexibility, we're talking about efficiency and the context here. we have a UN General Assembly meeting something is happening with the Deputy Attorney General in Washington maybe a change is happening there we have a trade war between the United States and China and arguably that is not the only one that is happening? To what extent does politics have an impact on the demand for a product? Your ability to project what the demand will be in the market these days or how business continues as usual. Oh, at least what we see, thanks in part.

For the industry we are involved in, digital technology is becoming increasingly ubiquitous in all parts of the world in all sectors of the economy and therefore I believe it is incumbent upon us as a technology industry to ensure thatThese companies are creating opportunities in all economies. every society because if you think about it, politics will always be associated with what is the well-being of any region, any community in any country and as long as technology can play a role in the ultimate success in creating surpluses that are equitably distributed. I think these short-term hurdles will work, but to me that's what I think is that we have a real opportunity that we're obviously taking advantage of, but we also have a responsibility to make sure that the technologies benefit a broad spectrum and the bill.

Q, technically a German company, how come you're not a US-based company at this time when there's a lot of trade tension between the US and Europe, between the US and a lot of different countries? from Asia, how does that affect the way people see sa? Q When you're looking to get involved with technology and build your business well, we obviously consider ourselves a truly global software company. I think it's a very important distinction; However, there is no doubt that tensions between, for example, some Asian countries and the United States are quite high at the moment and probably less so for a German company if you think about where the headquarters might be located, but speaking in Seriously, I think we are focused on making all technology leaders responsible for wanting things to work between countries and technology companies. and right now I think we would all benefit greatly from an environment where we stay focused on growth and, to me, open countries are prosperous countries and if you look at the history of the world, every time a country has been open, It actually equals more.

Trade offers more opportunities for everyone, so we live by that principle, but there is no doubt that in ASEAN countries in particular I see new strength in our Shantanu business model. It seems to me that we are entering a new era in the cloud where there will be more mergers and acquisitions, more partnerships. and initiatives like this, how do you see the market? Because it seems like for a while big companies like yourselves were putting off doing a lot of M&A because things were expensive, but your values ​​also went up and it seems like your pace of M&A.

You've gotten a little bit of your take on the M&A market right now. First, I think you know that the three of us were early adopters of the cloud and recognized the benefits of the faster innovation we could do in the trust cloud. and the security that comes from all of this data being in the cloud, but I think we look at it and say that to really solve fundamental customer problems, putting the onus of integration on customers to work with multiple small businesses just isn't is we're going to work and that's where I think what we're trying to do with ODI is to say that if the leaders in our categories can come together and make it work, that will be extremely enabling for the companies that do it, so I think that they will.

I see more consolidation as a result of IT professionals not wanting to integrate small systems but rather rely on large companies that are innovating at a rapid pace, certainly if you're the same, yeah, I mean, I think one of the things we're really doing . It is reducing friction and improving agility. One of the interesting things that Bill mentioned was, for example, the ASEAN region, if you look at cloud AI and the open data initiative, the idea that even a small business in Indonesia can now use sa P Adobe. and Microsoft to become much more fishermen is the real opportunity, so they are breaking down that barrier to be able to use the latest and greatest technology for every business in every part of the world by really working together.

Ah, it's easy to get started. easy to take data from one place to another easy to use AI to reason about it and create new experiences and it is surprising that in a sense we are commoditizing technology as an input to drive business and at ma expect to see an increase pace, I think that, first of all, if you look at all of our R&D budgets, I think most people obviously gravitate toward mergers and acquisitions, but the organic investments that each of us are making are by far the larger ones, of course, we're going to supplement them with M&A where it makes sense, but I think what you're really seeing is growth across all of our businesses driven by fundamentally organic growth.

It's an extraordinary moment to have the three of you sitting here talking about this open data initiative, Satya Nadella. thanks for putting it all together Shantanu narayan from Adobe bill McDermott frame/s ap thanks heavens in New York again for you the market has been by virtue of the fact that we have had this record run the Dow joins the record -setting movement the week In the past, the market has been able to ignore almost everything that comes out of Washington, so how does this factor into today's calculus for investors? I think today's event itself probably won't play a big role, I think the biggest one.

The risk outside Washington is based on escalation and the potential for tariff implementation. We've already seen some and we need to see what happens when it comes to 2019. The fundamentals have been exceptionally strong. When you look at the stock, you've seen extremely healthy buyback trading. Furthermore, that continues to support the market along with valuations that are by no means overstated, so we think it has a good context that we just named. Basically, we need to see what happens with the tariffs because they are a risk to the 2019 numbers. The market was already going to be down. today, as a result of these reports that China canceled the trade meeting, so we lowered that leg, as I said in the Rosenstein headlines, but it's been notable that the market hasn't cared much about trade either for over a few hours or a day, when you look at the profits, the profits so far have not existed, there has been no material impact in terms of results and profits, until now companies are starting to talk more and more. on the risk around terrorists, but again, no impact on earnings so far.

I think that's a risk that we're basically paying a lot of attention to for 2019 and that's where I think we're seeing a market by virtue of the fact that we've had this unprecedented run, the Dow Jones joining last week's unprecedented move. , the market has been able to ignore almost everything coming out of Washington, so how does this factor into today's calculus for investors? I think today's event. in itself probably won't play a big role. I think the biggest risk coming out of Washington is basically trade escalation and the potential for tariffs to be implemented. We have already seen some and we need to see what happens when it comes to 2019 regarding metals. has been exceptionally strong when you look at the stock, we've seen an extremely healthy buyback trade that also continues to support the market along with valuations that are in no way overstated, so we think it's got a good backdrop, we just need to basically see what happens. with tariffs because they are a risk to the 2019 numbers, the market was already going to be down today as a result of these reports that China canceled the trade meeting, so we lowered that tranche as I said in the Rosenstein headlines, but it has been notable.

Although the market hasn't really cared much about the trade for more than a few hours or a day, I mean, when you look at the earnings, the earnings so far haven't really been, there hasn't been any material impact in terms of final impressions. and profits so far, companies are starting to talk more and more about the risk related to tariffs, but again, there is no impact on profits so far. I think that's a risk that we're basically paying a lot of attention to for 2019 and that's where I think. I think you're seeing that the market has been pretty resilient so far.

You're not working on your models trying to account for what happens in the midterm elections. Only six weeks left. It is very difficult. I mean, look, there's a phase one. Part of phase 2 has been implemented in rates Discussion on phase 3 has been implemented Clearly phase 3 goes through numbers By 2019 we believe that it will drop at least five dollars in terms of EPS, if possible up to ten, but again it is very difficult distinguish between what is reality and what is basically noise. Yeah, well, we're going to have midterm elections and that's not noise. I mean, it's the reality of what's going to happen, the outcome is unknown at this point, Lindsey, so how do you take everything into account?

Yes, it is definitely difficult to take into account. Volatility is typically seen increasing significantly in the third quarter leading up to the midterm elections. with a 34% increase, we haven't seen that this year, looking at many of the different polls that are out there, it looks like the Democrats are going to take over the chamber, which would only result in more gridlock within Congress, which does not bode well for growth. and the market going forward, I don't know what could be negative about the stalemate in the White House or in Washington, what could they do? We've got the tax plan there, yeah, I've got the economy going, you know? full steam ahead, so why would stagnation be negative?

Do you know what I said wrong? I don't want to say it will be negative. What I really mean is that you will not see any growth policy being pushed, there will only be infighting, no. A lot of things are going to be done and you are right, the market generally works well when there is stagnation in the market. I just don't expect the numbers to increase if there is the same stagnation, it's good, yes, of course, and I and I. I think the current position of Congress and the way the election is anticipated to turn out, meaning the House with the Democrats and the Senate with the Republicans, that could change, but even if that happens, we have the growth policies in place.

March. Indeed, we have regulations that have been cut, we have a tax plan going forward, so I don't see what the problem is with that. I think stagnation would be fine in terms of what happens with Rosen Stein in the future. For me I don't really see the problems either, maybe this is the smoking gun that allows Trump to go after Jeff Sessions and say he worked for you, you should have known, you should have kept him in check even then, although I think it's a temporary sell-out. . in the market, but the market continues I'm with you, I'm more worried about inflation, we are seeing used car prices go up while oil is not part of the core, still, the impact of higher prices of energy is reflected in everything it feeds. stocks, so that's my biggest concern, so the market seems to be taking a 3.10 ten year or so Bravo instructor, your year end targets are 3000, we're not that far from that level right now, where point starts to get a little bit more bullish is there a search for a performance until the end of the year?

Do you feel comforted that these high-growth sectors that have driven much of this rally have taken a backseat to what seems to be a bit of a backseat? These value stocks that should be going up in what is a very strong economy are finally living up to the tariffs, the industrial stocks are performing very well, which is why we have had this price target for now almost a year and we have had to defend him on many different occasions earlier this year. When there was a lot of volatility, the market is still quite resilient. I think actually the market probably would have already been above 3000 if it weren't for the trade and the trade escalation and an old discussion about Terra, so for us again we're really looking at 2019 right now, if you look at the consensus , implies growth of around 10 percent, we think 11 percent is something that can be achieved, but again, that depends largely on what happens with tariffs.

If we think things start to converge, you get some kind of resolution. I would say the market can probably move at the same pace with earnings for next year, maybe five to ten percent, but if Terrance is implemented, then I think we may need to pause, the tariffs bring the inflation and Steve is right in identifying that, I think what you're doing. seeing right now in the US. Within 10 years we will see a movement towards three and a quarter percent. I also think when you look at energy right now, I think the street is underinvested when it comes to energy oil prices, you have Brent above $80 right now.

Brent crude oil will trend higher and higher for the rest of the year. Get to know me personally. I am increasing my exposure to energy. I think the trend is sent there, but I think there is a little bit for everyone in a daylike today. yes, you have some of the value names that you've been closing the gap between growth and value over the last few weeks and if you look at the market, equal weight versus cap weight, okay, equal weight is slightly outperforming, but in a There's a little bit for everyone today, so you've seen the tech names come back a little bit today, they're outperforming some of these text-oriented stocks, still on track for their worst month since March, it's but, but the The question is: will it exhaust the movement? that we've seen without technology coming back, it happened before, listen, it happened before again, so in July and August you may have borrowed a little bit from September.

I don't think that will change the general trend of technology itself. On Friday you get these communication services. sector, so talking to a lot of hedge fund managers this weekend they are going to lose Google they are going to lose Facebook they are going to lose TripAdvisor they are going to Baba they will enter the consumer discretionary sector now much much more investment how much more Joss, can the market go up from here without technology joining Joey? We have shown that it is not necessary. This quarter, healthcare is up nearly 12% and industrials are up 11% and we made new all-time highs in the Dow last week. reached a new record in the SP on several occasions, so it has already proven that you can have the best leading sector every three years, take a break and other sectors, as long as the earnings context is solid and the market itself is stable , they can take the lead and can drive the index, the new high quality design, listen to retailers at multi-year highs, some of them at all-time highs, who would have thought that was possible as recently as December and January , so yeah, it would be great if Amazon was There's no nine percent off a tie and Netflix was hitting new highs every day and Apple was creating new high-end products, you expect what I expect, a rebound.

I'm making it clear that it's okay if it's not personally, I think it's the biggest throw. the entire stock market right now is alphabetical, technically the setup here I think if you get this probably 20 25 points higher, no one is actually down on this stock, significantly outperforming Facebook amid this large cap tech drawdown . name, but leave that idea aside the big picture idea and I think this was alluded to earlier, actually, stagnation would be phenomenal. The American public said in Gallup polling recently that they prefer to include the Republicans they want to control right now. If they are Republicans, it is number one, number two.

If you go back to 1950, the stock market does the third best when you have a Republican in the White House and a Democrat-controlled House of Congress, it's not the best. possible scenario, but it's the third no, which is not negative, but that's why we ask our experts questions about the political calculation, if Rosenstein really is fired, what the outcome could be if that could tip the outcome in the schools across the United States or dramatically in the midterm elections, that's a really good question, if it were, if you were to ask me in December what is the biggest risk to the stock market.

I wouldn't have said recession or profits or anything from oil or anything like that, the dollar. I would have said an exogenous shock caused by something in Washington where we have a massive massacre on Saturday night and everyone loses confidence in the US stock market immediately. I no longer think that's the case because I think the market now expects some version of impeachment proceedings this fall, without saying that it will happen. succeed I'm not saying Trump is in trouble, I'm just saying the market now expects this to be the base case that we're going to have vicious politics, no maybe maybe Jimmy, the exogenous shock is the Democrats taking both houses and I mean, at some point, when you get to the carpentry shop tomorrow, I think that would be a shock in six weeks, let's not forget that that's not where all those questions will be asked, why else?

Because it's very unexpected, I mean, and I'm sure they do their polls too, everyone expects a Democratic House and a Republican Senate or electing a Republican Senate. Look if they go through an impeachment trial, in that scenario it has to stop in the Senate, if you're a Republican, you're not going anywhere if you're a Democrat, then I actually have to think about the investigations, although let me, they're fine because the big question Here is what the market has priced in. At least that's the big question for me, we have a divergence here that tells us the market is setting the price.

In many bad things, what is that divergence? You have incredible earnings, okay, Kearney's last two quarters earnings were just revealed and expectations are even higher. You mentioned that in terms of five to ten percent growth at this point. The five to ten percent growth cycle year after year is incredible, but the multiple has contracted two times since the beginning of the year, that's the way the markets say I don't know if it's the tariffs I don't know if it's the impeachment I don't know if it's in place, you would think that all the marketing is there and because they yelled at him: he believes that the market has set the price at the worst of the tariffs, yes, no, he believes that the market has a price because it doesn't agrees so I guess he's not expecting much either let me get the punch line okay whatever if he's priced in all the fares he's not Joe okay he's priced in bad news that's why we're. .. it turns out that no, what do you have, you will never finish, friend, the mobile is contracted because the rates have increased slowly and briefly, but they did, they were the yield of the - e-excuse me, the yield of a two-year bond , the other ten years increased and as a result, yes, you should not have an expanding stock market multiple. big profits tempered by the fact that money isn't as cheap as it used to be so it's not rocket science wait a second it's never one thing so don't say it's just one and no no it's not , it is not and By the way, earnings season is approaching, there have been no prior announcements.

Okay, this looks like a pre-announcer. Feel free to make your points, but let's make them listen to you at that moment. I'll just summarize. Look, you're getting ready for another one. Good earnings season for the third time in a row, what will happen? We will have expectations that earnings will continue to rise and multiples will contract. I don't think so, it's more likely at this stage of the cycle that multiples will start to recover, but we have that. from a disagreement at the desk about whether the tariffs are fully priced in, they are not President, this time last week I was talking about there was going to be a trilateral agreement between Mexico, Canada and the United States and that's why the market was rallying .

We haven't gotten that done so far and I think when it comes to what's happening with the Chinese, further implementation of these tariffs drives up prices, that's a problem for the American consumer, that's a problem for American corporations and It has an inflationary impact on the market. economy clearly the market doesn't think it's going to be as punitive to win 100 at this point absolutely I said I disagree I think what's priced in right now is a favorable outcome at some point Can I go back to your previous announcement point, Look, I don't agree with the facts.

I published an article about it last week saying it's been the highest and the percentage of negative pre-announcements since the first quarter of 2016, but you really can't have it both ways. You can't say how much is discounted in the market, but the strong earnings that everyone has been talking about and uniformly agree will happen this quarter are not well discounted, that's the point at which expectations are extremely high for the third quarter because I have had such good numbers in the first and second quarters. Expectations are high for the third quarter. You just saw the confidence from the CEO Business Roundtable today.

CEOs are worried about tariffs. Heard increases. They talk about it. They said it only affected. about 10 percent of their revenue so far micron mentioned it, we're going to hear this word on conference calls significantly, we don't even need to wait for the conference, of course, Macy's Office Depot. I could continue the list arguing all the red Smith. and I grew up with that, so I think there are two pairs of CEOs who do one of two things and they're not going to say, hey, Trump is doing the wrong thing, they're going to voice it and say, hey, we're going to be more cautious in the future. because costs increased to their point, we had the last quarter of the quarter before those big profits without the tariff problems and what the markets do after the quarterly announcements, what they did, what you did, you are right and then I want to make profits. there are fish there last time and you also have to use the numbers here 200 billion 10 percent tariffs 20 billion dollars a year in the S&P 500 I don't think it's going to show up I understand the concern about inflation, so no Saying it's not there, I'm saying it's small and it's in the market, that's what I'm saying, I questioned whether the worst of the tariffs is the one the marker hears, but you suggested yes, I did it, I stand by it, it's half of what the maximum possible tariffs now if we don't play if you get 25 percent on another you add another 267 okay you're right that I'm assuming rationality you have the rest against you now you have the Referee tell me if we continue to play I will see your 200 billion and I will raise you another 50 billion, which will be a problem for the market in the year 2000, the tariffs will be eliminated, no, I think the Terrans are partially discounted.

I don't believe it at all. I think if you move to phase 3, I mean, first of all, I think if they implement 25% in phase 2, that in itself will probably reduce some of the numbers by 19, which I don't think is enough. At full price, I think it partly is. I think the multiple is a function of rates in full agreement. However, I think trading is also something that limits re-reading the multi, maybe not at 2x, but re-classing at 1x, just another thing I just want. To mention very quickly, I totally agree with stagnation. I think it's positive because outside of DC last year you had a pro-growth agenda, this year you have an anti-growth agenda, so there's stagnation.

I think the market likes it. Can I ask you this? The market has been driven by buybacks. If CEOs sense a slowdown in growth, do you think you'll continue to see the aggressive nature of buybacks? We've seen it the last two times. You need to look at it even more if that's what they need to increase profits they would double it because there is no indication that they are seeing this slow control. A few moments ago we had Jamie Dimon, the CEO of JPMorgan, with our own Jim Cramer. It's an exclusive interview from CNBC in Philadelphia.

This is what he said about the state of the economy. United States, the economy is quite strong and it is growing at 3%, it has been going for a couple of quarters now and it seems that way there are no big bumps, so let me continue, there is no indication. Jamie Dimon sees a lot of things in the things that he looks at that we're going to have that slowdown that you say, well if we have a slowdown, companies will maybe buy a little less of their stocks, I think look at the big ones The risk are the tariffs and the impact on margins.

I think when you look at the economy you're basically looking at employment, which is very strong work, ultimately you're looking at some wage inflation which is basically helping consumers and, in fact, there's one thing that If you look at the second quarter and, like most companies, we're really talking about consumer strength, so again, I don't think the earnings picture is like that. I don't think it's so clear that expectations are expected to have increased, but I don't think they are extreme terraces that are negative, but on the other hand, I think that in economies, what is the opinion of the house on what is the view? of the house over ten years and quite a bit and just the premium and how small it's gotten and and what do you think would really affect stock prices if it didn't?

You know, if we're really not going to worry about the curve, then what would we worry about? I'm glad you asked that question because my next question for you was going to be We've been here, you know, 22 minutes and we talked about all of these potential inflation risks. I get it, but the word the Fed hasn't even been mentioned, but they will be front and center this week. The letter is that and it fits perfectly with Josh's yes, so look that the increase in Fed rates, I think it is a gradual negative effect, is affecting Marge slowly, but we estimate that the margins, for example, when profits are analyzed, margins will not be fully affected untilthe Fed raises rates. for another at least fifty two hundred bits, if you look at interest expenses and debt levels, I think the multiple is a function of yields again, if yields go up, let's say north of three and a half, three and three quarters, I think this becomes a But first let's get back to that: our internal opinion, I would say, is probably more in line with three and a quarter, three and a half now.

Pension funds. American pension funds. Corporate pension funds. Government pension funds are just insatiable buyers of ten-year Treasury bonds. They are becoming very important in private equity and therefore to counteract that lack of liquidity is a bar, on the other side they are going crazy with Troy, which I think is the reason for this narrowing of the spread and not economic concern. Would you agree with that? Okay, yeah, I have a lot of PMs, basically, call me asset alligators, call me a 10-year yield at three percent, that's a buying opportunity for everyone, yeah, huge reserves of because when you look at what's happening abroad with Germany, Japan, where are you?

I think the question I asked people and no one knows the answer to because we are in maritime rescue for the environment is: where do you see the restrictive policy? Now it used to be more than five percent. Clearly, that could still be there. let's say probably three and three quarters four percent, anything above that I think becomes restrictive unless new reasons emerge to suggest that growth will accelerate, but you don't have your sector, what I would recommend at the moment is the best . three places to be in the market we have been promoting a bar portfolio in recent months.

I'm using the same term here basically, we still like technology because we believe that in the late cycle you won't have exposure. For growth, people pay a premium for the gross value of cars in the city, but at the same time, given how extreme levels of dislocation in the market have become, we say don't stand naked on the value, we have value anchors, we like finances, we like industries, we like energy. but I guess the reason I asked you the question is by virtue of the fact that you have those sectors technology financial industrial energy cyclical growth you can't worry about all that no, we don't believe that the economic cycle nurtured by business is intact not only in the US but also globally.

I keep mentioning that tariffs and trade escalation are my biggest concern for 2019 in terms of whether we move sideways or potentially go up 10 percent when we look at emerging markets relative to where they are. versus the United States is that we think it's a great longer-term opportunity, so we think emerging markets are increasingly becoming a very attractive opportunity. The risk and reward are quite attractive. The positioning is very negative. The feeling is very negative. I'm with you on this. I mean, China is basically in recession territory. When we look at the gap between the US and China, we believe there are many interesting buying opportunities.

It's very difficult to find the catalyst and time it, but again, a six-month period. Looking back 12 months, we think I definitely think the risk on that trade is good, you get more reward, but a lot more has to go right for you to get the reward now. I disagree, we actually worked on this a lot recently. some client questions it turns out that when you buy emerging markets like Anand as a sector as an asset class after a 20% drop, CNBC exclusive Hi again Jeff, thank you very much Karl, yes, we are here with Jamie Dimon Jamie, this is a great commitment. to an area that has frankly gone from banked to unbanked.

The city just cashed out over the last five years $50 million and a network of 330 banks that have closed over the last 10 years, why not? Yeah, well, you know, with regulatory reform and tax reform, where? now you say that 20 billion dollars goes to many cities, obviously Philadelphia is the seventh largest brand in the United States that does not include its largest suburb called New York and you know that we and we like to be part of a community in the that we are already here. investment banking commercial banking and private banking retail is a gap, so we will open 50 branches, 20 percent will be in LMI neighborhoods, neighborhoods like this and we have come in, we bring the full force of JP Morgan, which is dollars of philanthropy, but we really help people as entrepreneurs finance affordable housing units and we enjoy it, it's good for the company and over time we invest for the long term, we never go in and out of something, we talk about the multiplier effect and when you open a Branch people think you know what we don't need branches anymore, everything is digital, yes, but the more it works, it's incredible, so I think people don't think clearly.

One million people visited branches every day. The branch type will change the size. The branch contains again smaller but with more advice, so there is a mortgage loan office there, there is a small business loan officer, there is a financial advisor, but your financial affairs, that will change, but a million people , even the average millennial, visits about three times a quarter. So for me the question of brands should not be forgotten that they will change but you still need to serve your customer the way he wants to be served not the way I want to serve him as you know we have also launched all these new products.

Maybe I mention this because many people feel that 10 years ago one of the problems was educating the borrower about wire transfer or not knowing enough about what to do. You literally said there was someone there. help and teach, yes, well that makes a difference compared to, say, 10 years ago, yes, I have told people here that when you go to these LMI neighborhoods try something special, but we will implement a lot of education tools in which you will invest. We are going to implement a self-assessment group and we have not decided on the price yet so you can get advice and think about that.

We already put it on the screen, you can get your FICO score and we will teach you ways and you that you can improve your FICO so that you can reduce the cost of a bar and things like that, we have to do a better job, not only us, but also States United, educating people on financial matters, from emergency funds to managing retirement accounts, and that's why we are making it special, I have to do that now, a lot of things will come out and I hope our clients enjoy it. Let's talk about the power of business versus the power of government.

The government legendarily got big deals from different banks. 13 billion dollars from you, yes. Keith Blood says you paid a total of 44 billion, that money went into the community and that was the way you do things versus the specific way you're doing it right, this actually makes the community better. I mean, some of those funds we actually don't know how they got dispersed and I think someday someone should look at that and that kind of past. We've made progress on how we do it, but that's how you build a community for small businesses that provide affordable housing branches that advise people and we know that that works.

Cities know this city from Philadelphia, its great hometown. Let's think that the city is doing better and better, but it is divided or not, and that is why we make a special effort in those parts of that city now that there is a sense that lending nationally is slowing down. I don't understand it about your bank. Can you give us a sense of what's happening in places that are frankly unbanked and whether there's a revival that can really move the needle field, so that's one of the most important ones? What these things work when you do it with civil society and the government is okay, they don't work, we are together, so we have seen it around the world when mayors, non-profit companies work together, you can get jobs for people. train them to get them jobs and it really works, but in the United States, the economy is pretty strong and it's growing at 3%, it's been doing that for a couple of quarters and it seems like that way there are no big bumps, so let me continue, so lending it there is a small reduction in lending at the mid-mark, we don't know exactly why large corporations, of course, public bond markets, customers might be too full.

I think you know that, but we do know that there is an effect that through tax reform and corporations or whatever money they need to borrow less, it's hard to understand, alleviate it, but that really means, but if you look at job growth, people are going back to work, it's pretty good, last week you told CNBC that It's not that, don't call it a trade war, call it a trade skirmish, you've previously said that sometimes there could be a slowdown or at least in the psyche because of any kind of trade war, how do you feel? your Traci gets twenty billion dollars in tariffs themselves they are a small attack if everyone gets paid they are attacks on the United States the member people do other things well, they have made supply lines, but it is a twenty trillion dollar economy , so that is a negative aspect, the real negative aspect is not that the consistency in trust if people start to reduce investment, people start to move supply chains, what we have seen already moves the markets a little and therefore the fear that the skirmish will turn into a war, then we really don't think that's a good way to go wrong, it could easily offset some of the benefits that you've seen from regulatory reform and tax reform .

I want you to talk to me directly about it. Yeah, Marian Lake recently said a fabulous CFO says I haven't really seen genuine regulation that would make her happy, but there's been so much that there's been a change in attitude, note, yeah, so I think if when I travel, CEOs from other industries, logistics, steel manufacturing pipeline, will all have seen it. We've seen real changes in regulation for us, they don't really have a long list of things they want to do. There have been regulatory changes for smaller banks that we fully support to make it a little easier for them to shrink and burn, but that wasn't the case.

I have nothing to do with the biggest banks, I think I mean the public, you know, we're not calling for Dodd-Frank to be scrapped, we're just people, we just look, we calibrate, we get rid of duplication, we look at the things that hurt.in the mortgage markets or in this type of market to be able to improve growth and do it safely, no one is looking, you know, going back to the old days, just recalibrating, remember there were 2000 rules, it was like one or two were many and they were already there. in a hurry and people show their recklessness and look at the cost-benefit, you know what makes sense, what doesn't keep the whole system safer, remember the growth of a stronger economy, it also makes the financial system safer , now that you just mentioned, there are no bumps in rates, we have a At the Federal Reserve meeting coming up this week, they spread that you would intend to use the typical logic that people say means you can't win so much money and if we can't lend so much, then I'm going to say that you know the potholes the homes are in good condition people who go back to work fight customers say those roads are fine flagship companies tax reform is still a benefit we don't have the extreme leverage we had an EO and all the loans have been pretty good, good loan, so it hasn't been billed, but absolutely there is friction out there, there is always friction, you open a newspaper any week of any month, there are tons of friction and it is increasing.

Brexit QE Turkey Argentina oh and we don't know the full effect of those things so yes we are keeping an eye on that but it may not derail the economy. You will see the two separated. I still think these are all things that should influence the strength of your balance sheet. The strength we have not seen. European banks really are on the run, so to speak, so why isn't JPMorgan making bigger giveaways given the weakness in the rest of the world? Well, we are in all countries and we are constantly growing and we are already doing it country by country.

The bankers, the systems people and all the support, they run the risk of complying with the legal credit, so our participation in Europe has increased considerably and we are just doing to add people and add branches, and you know, the basics, the old three meters and a cloud of dust. Listen stuff, I think you should get a higher price, vulnerable dirt, for Evans' sake he's selling it for 12 times next bookings, we've been theregame for a long time if, for your financial growth, with the money you earn every day, you open the door, why don't they value you as if you were the flower tea company?

That's a question you'll have to answer. Your banks are still under political regulatory restrictions and all that we just went through the crisis. I think many investors buy. I'm always a little worried, but you're right, worrying, very good returns on capital, we're growing, you know, when a cycle could obviously hit the bank, but we'll manage during that cycle just like we did during the last one. When I think about it, I think you must be there buying shares every day for the company. You have chosen a path of share repurchase. But still, many of the stocks you have owned for the last ten years are not going down. enough, when will you start to return to the level where you are actually not what you are absorbing the supply from the gate?

I don't remember the exact number, but our participation counts down like fifteen percent, yes, but we're doing six versus ten years. Three five ago yes, yes, well, one has been issued over time, but since I've been there it's been going down, so if you want to see something, I would rather spend that money without buying back shares, doing this to grow our businesses. much better for the economy right now, we don't have much choice, but over time I would really prefer not to buy back shares, you know, it would make sense for companies to do it.

I also don't believe in this argument that it is bad. Buying back shares is simply returning them to you, an investor, who then redistributes them to make better use of your redeployed capital that should be redistributed if a company can't use it, but my goal is always to grow our business, which we are doing now . Well, five hundred branches, we're now in all the major cities for investment banking, middle market banking, etc., we've been growing overseas, but think about the bankers and the people and things like that, so that's my preparation . P2pu does not invest in construction products and services.

You're going to see a lot more than that in the next twelve months when I think about this and I'm very proud of what you're doing in my hometown, but I say okay, Apple, to the pure capitalist, you know this? Jamie, we're shareholders, we should get that money. There is no real instant payout here in two or three years, it will take a long time, no, not true. I mean, first of all, you have to be careful with accounting, but when we build a branch, it's okay. and we put in a million. I don't know, we want to give the figures publicly.

We put capital into the branch, but five years later that branch could be earning by contributing a million dollars a year to profits, so you know the timeline for that new one. In cities, it's a little more complicated than opening a branch and seeing what we're up to, but again we already serve 60 million households, we want to serve 70 million, we want to get them to all the proxy services that we have, so there is a financial reward. It's just that it doesn't happen overnight, but I'm not worried about that. I just explained to people like you that okay, the NPV is very good and this could be negative the first year, you know, maybe there are breakdowns by the third year and then a plug or JPMorgan depositors we are not getting the rate that we get in the two years, when are they going to start paying their CD and their depositors more when the rates went down, they went down like that when the race went down to zero?

The banks did not do it. so the race started to go up, they didn't pass him. I think now you're asleep and you'll have other options, money market funds, etc., but I think now, as rates go up, the next 25, the next 25, you'll see. we call beta, you know how much is going to be transferred, it's going to go up and up, well that's going to reduce the profitability, no, I wouldn't worry, no, no, actually, because we are getting or earning deposits and the spread that you are maintaining between your cost of funds and your pain would be more or less the same Jamie that you are talking about with politics just as politicians did in 1964.

You talk about a war on poverty. Companies seem to be doing a better job. You mentioned. that in the big deals of, say, 2013, when Associate Attorney General Tony West was going after the bank that was, you're on the defensive, you're playing offense and trying to change poverty in this country, do you feel like you can do it? ? better in the government no, I think I feel you, I think the government and companies have to do it together and it works at the local level we see it in Detroit we see it in New Orleans we see it in Chicago we see it in Los Angeles you see it in Philadelphia with great ideas and most of the things we talk about affordable housing skills business development abra is not a democrat or a republican but I believe business and government together can do it business you can't do without business and business can't run without the government, you know?

The government is obviously going to play a role in terms of regulation and licensing and things like that, and while the United States is the most prosperous nation on the planet, we really need to focus on these issues around income inequality, infrastructure, opioid crisis, lack of education, the end of Zinna state schools. with good jobs Jamie yeah you know how you sound when you say these things you sound like a politician well I'm a patriot okay but if you're a patriot so was General Eisenhower we didn't know where there's a democrat republican . Friend ran for president because he was in a tree he won World War II well I'm a bank you're trying I'm not running I just think it's very important that we have good policies and that we should focus on good policies and all the time and you know, as you know, I don't mind talking about good policies, look at them and participate in any way that JPMorgan can, so if you're in other areas, no other company will do a better job than us.

We have a lot more knowledge, but in these types of areas we can really help communities, they are good business skills, sometimes transferable to government, although I think some are, yes, I mean administration, management, leadership, organization, but that doesn't mean that a CEO will translate into a good politician, you know, politicians have a whole different skill set and you know how to relate to people and have understanding and empathy, so I bet that doesn't mean I would never say never that people can or can't, some have done it, most have said never. saying never again brings me back to the dial I would never say never for someone else I wouldn't say that a CEO can't be a good president it's too soon and President Trump was a CEO so you just met a simple American professor in Philadelphia That's something that I wouldn't say is frowned upon, but wouldn't it be credible ten years ago, when bankers were considered the antithesis of democracy even thanks to President Obama?

What's changed enough that communities that were solidly Democratic areas are now being welcomed than Democratic areas where I think it's a really poor bench. It's good to be welcomed, but just so you know, we never stop seeing mayors, governors, presidents, prime ministers, Senators, even people who don't like us because we always said it's not about them. Are we doing a good job or are there legitimate complaints we should handle? What should we do to make things better for people? That's why we never stopped doing it, but it's good that you did it. You know, when people like you.

Well, I want to talk about country, you have gone on record as saying that we know that the best military education system is knowing the best educated, the best and the worst, okay, we are failing the kids in the inner city schools, half of them don't graduate like they do in poor neighborhoods and a lot of the kids don't get the skills they need to have a job and that's the feeling that we should sound the alarm about it but we don't and I don't know why. what, well, why not? to do beyond what you already did, what we are doing with a tremendous amount of skills, so in what we do, we go to local schools, like now we work in the government of New York to train and my wife did this to train children to be tellers $36,000 a year twelve thousand medical and pension benefits children like jobs and that is the first step, then they can move up they can become bankers and live in a large part of our branch, we are tellers and many of the regional ones the managers would tell us so we can do it ourselves, but we also help the local schools, well it's a high school and also apprenticeship programs, whether it's a community college with money, but it's not just us, it's all the companies that need jobs locally, they need special training, so you really have to do it Logue Should be a national point 1.5 trillion dollars in student loans twenty three percent default last year is supposed to be 40 percent cent by 2023 I know Marion Lake said look, that's not really a problem for a bank, but how about for a country it's a big problem, you know, we've given loans to the Seoul government, by the way, we should and the bad loans are bad, but it was the mortgages you make or the companies, one of the things you have to do is have discipline around capital, so you get a return bridges to nowhere are bad schools that don't work are bad Eleni new people with Kappa money it's a mistake so that student Lenny was a tremendous amount that has been made in the last seven years people are struggling to pay Again it's all owned by the government so taxpayers will lose hundreds of thousands of millions of dollars, but it's not good because what we're seeing today is that on other loans and mortgages, these kids are having a hard time getting auto mortgage credit.

They're having a hard time getting a credit card, so it's affecting the economy, it's not like the mortgage crisis, it's a trillion three or a trillion four, so it's not something I wouldn't call fundamental, it's just unfortunate, okay , let's go back to International for a Secondly, you talked about the tariff idea so far, you know you have a skirmish, but at what point would it be a war and at what point should we worry that it's really going overboard? You know, it worries me. And I just don't know, you know, I mean, I think China has been very predictable in retaliating and I think the market was expecting tit-for-tat retaliation.

I think they hope that NAFTA is fulfilled. It's going to get worse from here and I really don't know what I expect to happen, I hope they sit down and have rational conversations and we have a NAFTA which we should do because Canada, Mexico, good neighbors of ours, I'm going to Mexico at the end of this week and with China and I no longer know what the conversations are. Hynde closed the doors, so I don't really know if I urge, I think we should try to improve again. The president raised very, very, very good topics. We're just talking about the process.

They both reached their conclusion. I hope your process works. I just think it's a riskier way. The president said the problem with banker Jamie Dimon running for president, he doesn't have the application that intelligence teaches him and there's a poor public speaker nervous mess that doesn't sound like cooperation, yes, but how did you fix that? I mean, I'm sure in the last 10 days you fixed this. I haven't talked to the president, yeah, so and and, but that's okay. I made a mistake. I shouldn't yell at Yap in that way that some of you were mentioned on TV, but I want to focus on politics, so my opinion is let's focus on politics.

I shouldn't be taking photos and joking. at no one's expense, do you think you would put this in the case of, say, the London whale, where you said it was the stupidest thing that moments and the most stupid and embarrassing situation that I have ever been a part of? line height and well, no, I've said a lot of stupid things in my life, but London, well, we buy real money. The things you say are common sense things that we haven't heard from bankers. I've heard bankers be defensive for a decade. You're really saying that this is how public-private partnerships make these neighborhoods not better because the schools are much better and we change our country.

You change city by city. You're trying, but again. you have a lot of guests on TV you ask most of them what are they doing a lot of these companies are doing things like this it's not just JP Morgan but all these companies are part of the BRT but we actually published a job skills booklet everyone is doing something Minh does a lot of diversity other things are falling behind other countries we have seen I think in total we are falling I think bad politics is the reason whywe've grown 2% over the last ten years and no more and that 2% and American parks, you know, 20 percent growth in ten years is half of what it should have been, China is going to approve this .

I doubt it, okay, this country has been blessed with things that go far beyond. You know, the schools and your birth, the good thing is that the university is land, water, energy, the Atlantic Pacific, they are the best companies, innovation, but we had to sit down to face a series of problems, we fixed one, a tax system did not competitive for companies, which was a bad idea, we have to solve it. immigration inner city schools opioids you guys a chance to have a job we have to get people back to their job skills we should double the Earned Income Tax Credit and once have one to point out your reason and we should have a negative income tax of some kind they create jobs that people have because jobs give dignity jobs have better social outcomes but they should be a living wage so I agree with that concept when I listen to people and the Earned Income Tax Credit does that and we need to double it. we should double it and you have to pay more, so whether it's Satya Nadella, the CEO of Microsoft, you've put this group together, Shantanu Narayan from Adobe, Bill McDermott from s AP.

Frankly, I've never seen anything like this and I've been doing this on air and in print for a while, over a trillion dollars in market capitalization represented by you three gentlemen sitting here and you're announcing the open data initiative in Satya cloud, why is this so important? The three of us are building on the work that we are doing with many clients, you know, today we talked about coke Unilever Walmart as clients, we are all excited about this open data initiative, it is your real knowledge that led us to do this, which which is how we work to give them control of their own customers' data because that is the real currency.

Any brand cares deeply about the continuous improvement of its own customer data, since understanding and the three of us coming together will be essential to achieve this. they make them feel in control of their own customer data and the idea is that Microsoft with Azure Dynamics has a certain set of customer data, Adobe has the experience cloud, has a lot of marketing data, different types of data about the customer. and how companies try to get to the client's application, there's a lot of data, a lot of which has to do with what's going on inside the company that affects external clients as well, so our client will be able to do that. to do and maybe Bill.

I'll throw this thing at you that they couldn't do before, once you figure out this open data thing and they can read data across all your platforms. John, there isn't a CEO in the world who doesn't want to have a single view of their customers and they have to connect their demand chain with their supply chain and do it in real time, so if you think about the social mobile consumer , it's geospatial, it's always connected. Instantly, they will buy different companies across all channels, wholesale, wholesale and direct to consumer, and you have to make sure that the connection point with that consumer is really intimate, so these companies have to be companies intelligent because they are increasingly I and predictive. analytics is going to govern and how you interact with that customer, but ultimately what you have to do is deliver, so now you're going to see demand and supply chain fully integrated and that data is going to be shared equitably between our companies so that customer to be the primary benefactor of the open data initiative we announced today and Shantanu, you just announced that Adobe is purchasing Marketo.

I think it was four point seven five billion. I was trying to ask you about it a few days before and you didn't. I'm ready to talk to me about this, but you can talk about it now. How does that move an experienced cloud? And what you're trying to build there fits into this larger story. Well, I think the three of us share this vision of how we enable businesses to put customers at the front of the digital journey and Satya and Bill said that getting behavioral data, getting transactional data and making customer engagement front and center.

Center, I think it is the most important thing that companies can do to make digital truly a tailwind. Instead of headwinds, what Marketo does is add to our experience cloud offerings the ability to create this unified profile for all customers and what every customer will tell you today is that they want an engaging experience with whoever they're with. doing business. whether it's financial services, whether it's automotive, whether it's retail, and Adobe focused much more on b2c customers, but the same requirements that were valid for b2c customers are now valid for b2b customers and that's what that Marketo offers;

It's actually a group of senior executives created from ASAP, you know that runs Marketo. It's a closed party. Amazon. Google Salesforce. Welcome to this initiative. How does it work from here now that you're done? It's very clear, but the name itself should say it all. It is an open data initiative. You guys in tech name all kinds of things, the ethos here is not about us, it's about really unlocking the data which is our customers' data about their own customers, but I think the bottom line here is trust, in other words Ultimately, customers will decide and comply. with your own customers, trust in them will also be very key because if you think about it, one of the main considerations for everything related to customer data is privacy and regulation around privacy, so More important here would be for each supplier to think carefully. how they participate here and ensure that there is more trust throughout the value chain, from the end consumer to the brand and us as software providers or technology companies, so I think, depending on the business model, I think the real The challenge will be for some who really want to join, but their business model probably won't allow them to join like you think.

It will be more difficult for Amazon or Google, you will have to ask them, but I think in general. although we have all focused on whether we can create an architecture, an incentive system that changes the course so that customers have control of their own data. I think the economy in general will be better now, so that's what we're trying to do. John, if I can add to that for a second, I mean what we've already demonstrated by having a common taxonomy for this customer journey, meaning what does it mean, how do you define a customer, how do you define the demographics, how do you define a customer?

Lifetime value is defined, how your interests are defined. We've actually reached a deal between all the companies even though we have some fun products in that space. I think it demonstrates our commitment to this open data initiative and the fact that we have customers who are excited to build on the foundation we have. I think it gives us a lot of confidence that this is the right thing for companies. Keep in mind how long you think it will take. To get the Box today, are the specifications of this year's initiatives so that other companies can join.

What do they have to do with their platforms and their software to be compatible. I think today's big announcement represents that the Microsoft Adobe NS application has already started this journey, so in terms of others who want to join the journey, we are happy to share the reference architecture. Around the ODI initiative, I think the big story here is trust and I think Satya and Shantanu said it very well. Think of trust as the main human currency. Thinking about the customer experience is the most important priority. Think about the power of attracting people. Within these companies, focus clearly on what happens outside of these companies.

This idea of ​​the net present value of a happier, more loyal customer, as well as making employees more inspired and more loyal, is probably the biggest value driver we've ever come up with. Let me think about this: a 5% improvement in retention equates to a 95% improvement in profits for most companies, so if we can connect that data to your consumers and give them an unimaginably good experience, what effect will that have in revenues and profits? for all the companies we care about, a breakthrough, ok, we're talking about flexibility, we're talking about efficiency and the context here we have a meeting of the UN General Assembly, we have something to do with the Deputy Attorney General in Washington, maybe there is a change happening there, we have a trade war between the US and China and arguably that's not the only one going on.

To what extent does politics have an impact on product demand? Your ability to project what demand is. We will be in the market these days or as business as usual. I look at what at least seems like thanks in part to the industry that we're involved in, digital technology is becoming more and more ubiquitous when all parts of the world are in all sectors of the economy and therefore I think that It is up to us as a tech industry to ensure that these companies are creating opportunities in every economy and every society, because if you think about it, politics will always be associated with what the good is. -being from any region, any community in any country and as long as technology can play a role in the ultimate success in creating surpluses that are equitably distributed, I think these short-term obstacles will work, but for me that is what believe.

We have a real opportunity that we're obviously taking advantage of, but we also have a responsibility to make sure that the technologies benefit a broad spectrum and technically bill sa P, a German company, what's it like to not be a US-based company in This time when there's a lot of trade tension between the US and Europe, between the US and a lot of different countries in Asia, how does that affect the way people view sa P when they're looking to engage with technology and develop your businesses? Obviously, we considered it. We are a truly global software company.

I think it's a very important distinction; However, there is no doubt that tensions between, for example, some Asian countries in the United States are quite high at the moment and probably less so for a German company when you think about where the headquarters might be. be located, but in all seriousness, I think we are focused on all technology leaders being responsible for wanting things to work between countries and technology companies and right now I think we would all benefit greatly from an environment where Let's stay focused. growth and for me open countries are prosperous countries and if you look at the history of the world, every time a country has been open, it actually equals more trade, more opportunities for everyone, so we live up to that principle, but there is no doubt In ASEAN countries in particular, I see new strength in our business model.

Shantanu. It seems to me that we are entering a new era in the cloud, where there will be more mergers and acquisitions, more partnerships and initiatives like this. What does the market look like? Because it seems like they are big companies for a while. Like they were putting off doing a lot of M&A because things were expensive, but their values ​​also went up and it seems like their pace of M&A has picked up a little bit. What's your take on the M&A market right now? Well, first, I think. You know, the three of us were early adopters of the cloud and we recognized the benefits of the faster innovation that we could do in the cloud, of the trust and security that comes from all this data being in the cloud, but you know, I think that We're looking to look at it and say that to really solve fundamental customer problems, putting the onus of integration on customers to work with a bunch of small businesses is just not going to work and that's where I think you know what we're trying to do. with ODIs.

I say that if our category leaders can come together and make it work, it will be extremely enabling for companies to do so, so I think we will see more consolidation as a result of IT professionals not wanting to integrate small systems but rather rely on large ones. . Companies that are innovating at a rapid pace feel the same way. Yeah, I mean, I think one of the things we're really doing is reducing friction and improving agility. One of the interesting things that Bill mentioned was saying ASEAN. region, if you look at cloud AI and the open data initiative, the idea that even a small business in Indonesia can now use sa P Adobe and Microsoft to become much more fishing is the real opportunity, so we are breaking down that barrier to be able to use the last andbest technology for every business in every part of the world by really working together it's easy to get started it's easy to take data from one place to another easy to use AI to reason about it to create new experiences and it's amazing that in some sense we are commoditizing the technology as input to boost the business is good and, in ma, it is expected to see a greater pace.

I think, first of all, MA, if you look at all of our R&D budgets, I think most people obviously gravitate toward M&A, but the organic investments that each of us make. Manufacturing is by far the biggest, of course, we're going to supplement that with M&A where it makes sense, but I think what you're really seeing is growth across all of our businesses, driven by fundamentally organic growth. It was an extraordinary moment to have the three of you sitting here talking about this open data initiative Satya Nadella thank you for putting it all together Shantanu narayan from Adobe bill McDermott frame/s ap thank you heavens in New York back to you the market has been under The The fact that we've had this record, the Dow Jones joining last week's record move, the market has been able to ignore almost everything coming out of Washington, so how can this be put into the current calculus for investors?

I think that today's event itself probably won't play a big role. I think Washington's biggest risk lies between escalation and the potential for tariff implementation. We have already seen some and we need to see what happens as far as the fundamentals of 2019. have been exceptionally strong when you look at the shares, we have seen an extremely healthy buyback operation that also continues to support the market along with valuations that in no way way they are overstated, so we think we have a good context, we just basically need to see what happens with the tariffs because they are a risk to the 2019 numbers, the market was already going to be down today as a result of these reports that China canceled the trade meeting, so we lowered that leg as I said in the Rosenstein headlines, but it's been notable, however, that the market hasn't really cared much about trade, whether for more than a few hours or one day.

When you look at the earnings, the earnings so far have not been there, there has been no material impact. In terms of results and profits, so far companies are starting to talk more and more about the risk related to terrorists, but again, there is no impact on profits so far. I think that's a risk that we're basically paying a lot of attention to for 2019 and that's it. where I think you're seeing that the market has been pretty resilient so far, you're not working on your models trying to take into account what happens in the midterm elections, it's only six weeks away, it's very difficult, I mean, look, there's a phase. one on tariffs has been implemented, part of phase two their discussion on phase three has been implemented clearly, phase three goes through the numbers for 2019, we believe it will be down at least five dollars in terms of EPS, if possible until ten, but again it's very It's hard to distinguish between what is reality and what is basically noise, yeah, well, we're going to have midterm elections, that's not noise, I mean, it's the reality of what's going to happen. pass, the result is very unknown at this point, Lindsey, so how do you factor everything?

Yes, it is definitely difficult to take into account. Typically, a significant increase in volatility is seen in the third quarter. Before the midterm elections, they typically increase by 34%. We haven't seen that this year, looking at many of the different polls that are out there, it looks like Democrats are going to take over the chamber, which would only result in more gridlock within Congress, which doesn't bode well for growth. and the market in the future. I don't know what could be negative about a stalemate in the White House or in Washington. What could they do? We have the tax plan there, yes, you have the economy going.

You know, full steam ahead. So why would stagnation be negative? What I really mean is that if we are not going to see any growth policy being pushed, there will just be infighting, not much is going to be done and you are right, the market generally works well when there is stagnation. the market, I just don't expect the numbers of fabulous copies to increase, there's the same stagnation, it's well, sure, yeah, sure, and I and I think the way Congress is positioned now and the way it's anticipated that elections will come out, which is the House with the Democrats and the Senate with the Republicans that could change, but even if that happens, we have the policies for girls in place, we have regulations that have been cut, we have a tax plan in the future, so I don't see what the problem is with that.

I think stagnation would be fine in terms of what happens with Rosen Stein in the future. I don't really see the problems there for me either, maybe this is the smoking gun that allows Trump to go after Jeff. Sessions and you say he worked for you, you should have known, you should have kept it under control even then, although I think it's a blip in the market, but the market continues. I'm with you. I'm more worried about inflation than we are. We're seeing used car prices go up while oil is out of the core, but the impact of higher energy prices is reflected across all commodities, so that's my biggest concern, for what the market seems to be taking a three point ten ten year window, approximately three points.

Easy, Bravo, your year-end goals are 3000. We're not that far from that level as we speak. At what point does it start to become a little more bullish? Is there a search for performance until the end of the year? Take some comfort in knowing that these high-growth sectors that have fueled much of this rally have faded into what appears to be a bit of a backseat. These value stocks that should be rising in what is a very strong economy are finally living up to industrial tariffs. The stock is performing very well, which is why we have held this price target for almost a year and have had to defend it on many different occasions earlier this year where there was a lot of volatility.

The market is still pretty resilient, I think actually. the market probably would have already been above 3000 if it wasn't for the trade and the trade escalation and an old discussion about Terra, so for us again we are looking at 2019 at the moment, if you look at the consensus, we think that It implies a growth of around 10%. 11 percent is something that can be achieved, but again it depends a lot on what happens with tariffs. If we think things start to converge, you get some kind of resolution. I would say the market can probably move at the same pace as earnings for the next year, maybe five. at ten percent, but if it is being implemented then I think we may need to pause for the tares to bring inflation and Steve is right to identify that.

I think what you're seeing right now in the US over ten years is that you're going to see a move towards three and a quarter percent. I also think when you look at entering right now, I think the street is underinvested when it comes to energy oil prices, you have Brent above $80 right now, Brent crude oil trending for the rest. of the year is going to be higher and higher, I know myself personally. I am increasing my exposure to energy. I think the trend sends there, but I think there's a little bit for everyone on a day like today, so yeah, you've got some of the worthy names.

You close the gap between growth and value in recent weeks and if you look at the market, equal weight versus cap weighted, equal weight slightly outperforms, but on a day like today there is a little bit for everyone, so They already saw the technology. The names are coming back a bit today, they're outperforming some of these value-oriented Intexes, still on track for their worst month since March, but the question is whether it exhausts the movement we've seen without the tech coming back. It's happened before, listen, it's happened before again, so July and August may have borrowed a little bit from September.

I don't think that will change the general trend of technology itself. This communication services sector appears on Friday, so we spoke to a lot of hedge funds. managers this weekend they are going to lose Google they are going to lose Facebook they are going to lose TripAdvisor they are going to Bava is going to enter the consumer discretionary sector now much more investment how much more can Josh go up the market from here? without technology coming together, coming together even though we've proven it's not necessary this quarter, healthcare is up almost 12% and industrials are up 11% and we made new all-time highs in the Dow last week, we made a new record in the SP on several occasions, so it has already shown that the best leading sector every three years can be made to pause and other sectors, as long as the earnings context is strong and the market itself is stable , they can take the lead and push the index to new high look listen to retailers at multi year highs telling them all time highs who would have thought that was possible as recently as December January so yeah it would be great if Amazon didn't have a nine percent off and Netflix was hitting new highs every day and Apple was making new high-end toys.

Do you expect a rebound? I'm pointing out that it's okay if it's not in person. I think the biggest tone in the entire stock market right now is the alphabet, technically the setup here. I think if you get this probably 20 or 25 points higher, where really no one is down in this stock, significantly outperforming Facebook amid this large-cap tech selloff, the name is the alphabet, but leave that thought aside , the big picture idea and I think. As was alluded to earlier, in reality, the stagnation will be phenomenal. The American public recently said in Gallup polling that they prefer Republicans to be included.

They want to control this president right now, even if they're Republicans, he's number one, number two, if he really looks like he's going to go. If we go back to 1950, the stock market does the third best when you have a Republican in the White House and a Democratic-controlled chamber of Congress. It's not the best possible scenario, but it's the third. No, it's not negative, but that's why we ask. the questions to our experts about the political calculus if Rosenstein is really fired and what the outcome could be if that could swing the outcome in every school in America or the dramatic midterm elections that's a very good question if you asked me in December which It is the biggest risk to the stock market.

I wouldn't have said recession or profits or anything about oil or anything like that: the dollar. I would have said an exogenous shock caused by something in Washington where we have a massive massacre on Saturday night and everyone. You lose confidence in the US stock market immediately. I no longer think that's the case because I think the market now expects some version of the impeachment process this fall. I'm not saying it will be successful. I'm not saying Trump is in trouble. I'm just saying that the market now expects this to be the base case that we're going to have vicious politics, no, maybe, Jimmy, the exogenous shock is that the Democrats take both chambers and I mean, at some point, when you have a carpentry workshop tomorrow, I think that would be the surprise is that you are only six weeks away, let's not forget that it is not in that way where all those why questions will be asked because it is very unexpected, I mean, and I'm sure that you also do your polls, everyone expects a democratic house and a Republican Senate or elect a Republican Senate see if they go through an impeachment trial in that scenario you have to stop at the Senate if it's Republican it's not going anywhere if it's Democrat then You really have to think about the investments that the Asians follow, let me because the big question here is what the market has discounted, at least that's the big question for me, we have a divergence here that tells us that the market is discounting a lot of bad things, what is that divergence?

I have great earnings, okay, the last two quarters earnings were just revealed and expectations are still rising. You mentioned that in terms of 5 to 10 percent growth in this late stage of the cycle, 5 to 10 percent growth year over year. It's incredible, but the multiple has contracted since the beginning of the year, that's the way the markets say, I don't know if it's the tariffs, I don't know if it's the impeachment, I don't know if it's in force, you'd think that marketing is all there and the rest, apart from the two, do you think that the market has discounted the worst of the tariffs? yes no, do you think that the market hasexpected, let me get the punchline here, okay, whatever, if it's discounted on all the tariffs, the tariffs are not true, okay, it's The price of bad news that's why we're... lights up, no, What's wrong, you're never going to finish, friend, the mobile is contracted because the rates have increased slowly and briefly, but they had to give in on the... sorry for the performance in two. -year, the over ten years have increased and as a result, yes, you should not have a multiple of the expanding stock market, you have large gains tempered by the fact that money is not as cheap as it was well, so which is not like a rocket. science, wait a second, it's never a thing, so don't say it's mostly a thing and no, no, it's not, it's not and by the way, earnings season is coming up, there have been no prior announcements, well, it seems like that's basically it Now feel free to make your point, but let's make them listen then.

I'll just summarize. Look, you're gearing up for another good earnings season for the third time in a row. What will be fulfilled? Are we going to have expectations that profits will continue to increase? and contract multiples I don't think so, it is more likely at this stage of the cycle that the multiple will start to recover, but we have a big disagreement on the desk as to whether the fees are fully priced, they are not president, there is at this point last week I was talking about there was going to be a trilateral agreement between Mexico, Canada and the United States and that's why the market recovered, we haven't gotten it and I think when it comes to Oh, what's happening with the Chinese? further implementation of these tariffs increases prices, that is a problem for the American consumer, it is a problem for American corporations and it has an inflationary impact, but the market does not clearly reflect the economy, the market does not believe that it is going to be as punitive to profits. 100 at this point I absolutely said I disagree.

I think what is valued at this moment is a favorable outcome at some point, can I? I'm just going back to your point before the announcement. Look, I won't agree. Facts had published an article about it last time. week saying that it has been the highest percentage of negative pre-announcements since the first quarter of 2016, but you can't really have it both ways, you can't say that the market takes much into account and yet there are strong gains from which everything The world has been talking and uniformly agrees that it will happen this quarter is not well judged, that is the point, expectations are extremely high going into the third quarter because we have had such good numbers in the first and second quarter, and the expectations They are high heading into the third. quarter, you just saw the confidence from the CEO Business Roundtable that came out today.

CEOs are worried about fees. Heard UPS talk about it. They said it only affected about 10 percent of their income so far. Micron mentioned it. We're going to hear this word on conference calls in a meaningful way. Third quarter, what if you have to wait until the conference? Macy's Office Depot. I could continue the list arguing all the threads. Smith and I grew up with that, so I think what you're looking for after pears are CEOs who do one of two things they're not. I'm going to say, hey, Trump is doing the wrong thing, well, they're going to put it out there and say, hey, we're going to be more cautious in the future because costs are going up.

To your point, we had the last quarter of the quarter before those big profits without the tariff problems. and what the markets do after the quarterly announcements what they did what Derek was right and then I want to make profits are fish there last time and also you have to use the numbers here two hundred billion tariffs at ten percent twenty billion dollars a year in the sp500 I don't think it's going to appear I understand the concern about inflation, so I'm not saying it's not there, I'm saying it's small and that's in the market, that's what I'm saying and since we ask the question if the worst tariffs are here, but you suggested yes, I did it, I stand by it, it's half of what the maximum possible tariffs are now, if we don't play, if you get 25% on another, you throw on another 267, okay, You are right, I am assuming rationality, you have the rest against you now, eh, you also have the referee on top, if we continue playing a game of I will see your 200 billion and increase it another 50 billion, that will be a problem for the market in 2004, tariffs on Rothko no, I think I think the terrorists are partially discounted, I don't think completely, I think if you go to phase 3, first of all, I think if they implement 25% in phase 2, that in itself itself will probably reduce some of the figures by 19, which I don't think is totally included in the price, I think it partly is.

I think the multiple is a function of rates and I totally agree. However, I think trading is also something that limits the multiple rerating, perhaps not at 2x, but at 1x. Stagnation is just another thing I want to mention very quickly. I totally agree with stagnation. I think it's positive because we left DC last year. This year you had a pro-growth agenda, you have an anti-growth agenda, so you are paralyzed. I think the market likes that. I can ask you? This market has been driven by buybacks if CEOs sense a slowdown in growth, do you think?

They will continue to see the aggressive nature of buybacks that we have seen in the last pair and will not need to see them further, so if that is what they need to increase profits, they would double down as there is no indication that they are seeing any more. That's how slow we had Jamie Dimon, the CEO of JPMorgan, a few moments ago with our own Jim Cramer. It's an exclusive interview from CNBC in Philadelphia. Here's what he had to say about the state of the economy. United States, the economy is pretty strong and it's growing at 3.% it's been that way for a couple of quarters and it seems like there aren't any big bumps that way, so let me continue.

There's no indication that Jamie Dimon sees a lot of things in the things he looks at that we're going to get. That slowdown you say, well, if we have a slowdown, companies might buy back a little less of their stock now. I think the big risk is tariffs and the impact on margins. I think when you look at the economy, you're basically looking for jobs. which is a very strong work in strong, you are finally seeing some wage inflation which is basically helping consumers and in fact there is one thing that if you look at the second quarter of most of the companies in Ghana, actually we're talking about consumer strength, so again I don't think the earnings picture is that clear, you know, you expect expectations to have risen, but I don't think they're extreme.

It's negative, but on the other hand I think you have an economist, what is the opinion of the house on what is the opinion of the house on the ten years and Quentin and just the cousin and how small it has become and what do you think it would really affect stock prices if not, you know if we're not really going to worry about the curve, then what would we worry about? I'm glad you asked that question because my next question was going to be, we've been here for 22 minutes and we've talked about all of these potential inflation risks.

I get it, but the word that the Fed hasn't even been mentioned yet, they're going to be front and center this week, how much of a wild card is that? And it fits perfectly with Josh's question, yes, so look at the Fed's rate hike, I think, is an incremental measure. Negative, it's eating into margin slowly, but we estimate that margins, for example, when you look at profit margins, won't be completely affected until the Federal Reserve raises another at least fifty two hundred bits if you look at expenses for interest and debt levels, I think the multiple is a function of yield, so again, if it goes higher, say north of three and a half, three and three quarters, I think this becomes an issue, but first let's get back to that.

I would say our view of the house is probably more in line with now between a quarter and three and a half pension funds American pension funds corporate pension funds government pension funds are just insatiable buyers of 10-year Treasuries, they're investing a lot in private equity and therefore to counteract that lack of liquidity is a bar on the other hand, they are going crazy with Troy, which I think is the reason for this narrowing of the spread and not the economic concern. Would you agree with that? I would agree, yes, I have had many PMs, they basically tell me, asset allocators tell me 10-3 percent annual return, that's a buying opportunity for everyone, yes, a big increase when you look at what what's happening abroad with Germany, Japan, where do you think is the question I ask people whose answer no one knows because we?

We are in maritime rescue for the environment. Where do you see a restrictive policy? Now it used to be above five percent. Clearly he couldn't be there anymore. Where is? So I would say probably three and three quarters four percent. Anything above that I think becomes restrictive. Unless new reasons emerge to suggest growth will accelerate, but you don't have your czar waiting, you already know your sector, what would you recommend at this point? They are the top three places to be in the market that we have been pushing for the last few months. bar portfolio I'm using the same term here, basically, we still like technology because we believe that in the late cycle you won't have exposure to growth, people pay a premium for the gross car in the city, but at the same time, given how extreme these market placement levels have become, we say don't go naked on the value side, we have value anchors, we like financials with industrials, we like energy, but I guess the reason why I asked the question is by virtue of the fact that you have those sectors: technology, finance, industry, energy, cyclical growth, you can't worry so much, no, we are not, we believe that the economic cycle nurtured by companies is intact, no. only in the US but also globally.

Mentioning tariffs and trade escalation is my biggest concern for 2019 in terms of whether we move sideways or potentially go up 10% when we look at emerging markets relative to where they stand compared to the US, it's that there is a great opportunity in the longer term. -We think that emerging markets are increasingly becoming a very attractive opportunity. The risk and reward are quite attractive. The positioning is very negative. The feeling is very negative. Look at the gap between the US and China, we think there are a lot of interesting buying opportunities, it's very difficult to find the catalysts and time the catalyst, but again, a six-month view or a 12-month view, we think I definitely think it's the risk.

In that trade, well, you get more reward, but a lot more has to go right for you to get the reward now. I disagree, we actually worked on this a lot recently, we had some questions from clients, it turns out that when you buy emerging markets like Anand as a sector as an asset class after a 20% drop exclusively on CNBC Hi again Jeff, thank you very much Karl, yes we are here with Jamie Dimon Jamie, this is a great commitment to an area that, frankly, has gone from being a bank to an unbanked city. 15 million dollars were withdrawn over the last five years and a network of 330 banks have closed in the last 10 years, why not?

Well, you know with the regulatory reform and the tax form where you're now saying $20 billion is going to a lot of cities, obviously, Philadelphia. is the seventh largest brand in the United States that does not include its largest suburb called New York and you know that we and we like to be part of a community that we are already here in investment banking, commercial banking and private banking, retail is a gap, so we are going to open 50 branches, 20 percent will be in LMI neighborhoods like this and when we come in we will bring the full force of JP Morgan, which is philanthropy money, but to really helping people as entrepreneurs, it funds affordable housing units and we enjoy it.

It is good for the company and over time we invest for the long term, we never take it out of something, we talk about the multiplier effect and when you open a branch people think you know what, we no longer need branches, everything is digital. Yes, but brick, the more it works, it's incredible, so I think people don't think clearly. One million people visited branches every day. The branch type will change the size that the branch contained. They are getting smaller, but there are more councils, so there is a mortgage office. There's a small business loan officer there, there's a financial advisor,but your financial affairs, that will change, but a million people, even the average millennial, visits something like three times a quarter, so for me the question of brands is no longer forgotten. change, but you still need to serve your customer the way they want to be served, not the way I want to serve them, since you know we've rolled out all these new products as well, like finding online-only support, such once mention this. because a lot of people feel like 10 years ago one of the problems was education, the borrower, the child or didn't know enough about what to do, you said there was literally someone there to help and teach, yeah well that makes a difference versus let's say 10 years ago, yes, I told people here that when you go to these LMI neighborhoods try something special, but we were going to implement a lot of financial education tools, we will ask you to invest, we will implement a self-advisory group and we have Still We have not decided the price so you can advise and think.

We already put it on the screen. You can get your FICO score. We will teach you ways and what you can improve your FICO so you can reduce costs. Things like that we have to do a better job, not just ourselves, but America, of educating people about financial matters, from emergency funds to handling, you know, retirement accounting, and so we're especially doing that now, only things come out that hopefully our clients will enjoy, let's talk about the power of business versus the power of government, the government legendarily got big deals from different banks, 13 billion dollars from you, yes, Keith Blood says you pay a total of 44 billion, did that money go to the community?

What it did was that the way you do things versus the specific way you're doing it right, this really improves the community. I mean, some of those funds we don't really know how they were dispersed and I think someday someone should look at that and you know, I've cried in the past, we've made progress on how we do it for you, but that's how you build a small business community. that provide affordable housing branches that advise people and we know that works. Cities know this city Philadelphia, your great hometown. I think the city is doing better and better, but whether we separate it or not, so we make a special effort in those parts of that city.

There is now a sense that lending nationwide is slowing. I don't get that from your bank. you give us a sense of what's happening in places that are frankly unbanked and whether there's a resurgence that can really move the needle field, so one of the most important aspects of what these things work when you do it with the civil society and government okay, they don't work, we're together, so we've seen it around the world when mayors, nonprofits work together, you can get people jobs. train them to get them jobs and it really works, but in the United States, the economy is quite strong and is growing at 3%, it has been doing so for a couple of quarters and it seems that that way there are no big bumps. so let me go ahead and lend it there is a small reduction in lending at the mid mark we don't know exactly why large corporations of course the bond markets the public markets could be up I think you know, yes we know there is an effect that through tax reform and corporations or whatever money they need to borrow less it's just hard to understand how to alleviate it, but that really means, but if you look at job growth, people are going back to work, it's pretty good now, the week last time, you said CNBC that it's not, they don't call it a trade war, I call it a trade skirmish.

Earlier you said that sometimes there could be a slowdown or at least in the psyche due to any kind of trade war, how can that be? I feel like I told you that Traci gets twenty billion dollars of tariffs in and of themselves are a bit of an attack if all you pay is a tax on the Americans, they do other things, they have other supply lines, but the economy of 20 trillions of dollars, so that is something negative, the really negative thing is not that it is about consistency in trust, if people start to reduce investment, people start to move supply chains, what we have seen is already moving markets a bit, so the fear of the skirmish turning into a war We really don't think that's a good way to go wrong.

They could have easily said some of the benefits they've seen from regulatory reform and tax reform. I want you to talk about regular for me. Yeah, Marian Lake recently said a fabulous CFO said I haven't really seen any genuine regulation that would make her happy, but there's been so much that there's been a change in attitude, no, yeah, so I think if when I travel, CEOs of other industries, logistics, steel manufacturing, everyone has seen it, have we seen? real changes in regulation for us they don't really have a long list of things they want to do there have been regulatory changes for the smaller banks which we fully support to make it a little bit easier for them reduced to burning them but it wasn't like that I have nothing to say do with the larger banks, I think I mean the public, you know, we're not calling for Dodd-Frank to be eliminated, we're just people, so we're looking to calibrate, get rid of duplication, look at the things that hurt the mortgage markets or in this type of market to be able to improve growth and do it safely, no one is looking at, you know, going back to the old days, just recalibrating, remember there were 2000 rules, it wasn't like one or two were a lot and they were done hurriedly and people show that it is reckless and look at the cost-benefit, you know what makes sense, what doesn't keep the whole system safer.

I remember growth, a stronger economy, also makes the financial system safer. Now that you just mentioned, there are no bumps in rates. We have a Federal Reserve meeting coming up this week and they said you would intend to use the typical logic that people say that means you can't make as much money and if we can't lend as much, I'm going to say there are no bumps in the road. , homes are in good shape, people are going back to work, fighting, customers say hydro stores are fine, flage companies tax reform is still a benefit, we don't have the extreme influence that we didn't have Oh 8 and and everyone the loans have been pretty good, good, good loans, so they have not been billed, but absolutely there is friction out there, there is always friction, you open a newspaper any week of any month, there are tons of friction and it is increasing brexit us Turkey Argentina oh and we I don't know the full effect of those things, so yes, we are keeping an eye on that, but it may not derail the economy.

You will see the two separated. I still think these are all things that should contribute to the strength of your balance sheet. I haven't seen that we have European banks that are really on the run, so to speak, why doesn't JP Morgan give it a greater presence given the weakness of the rest of the world? Well, we are in all countries and we are stable. growing and we do it country by country more bankers, systems, people and all the support, risk, legal compliance of credit, so our participation in Europe has increased considerably and we are just doing to add people and branches, and you know, the old and basic three meters. from the dust cloud, okay, when I listen to the three of us, I think you should get a higher price.

Dirty vulnerable for Evans' sake, you're selling him twelve times over for additional surgeries. We've been in this game for a long time if we're you. financial growth with money earned every day, you open the door, why don't they value you like a flower tea company? That is a question you will have to answer, so your banks are still under political regulatory restrictions and all that just happened because of the crisis I think many investors always buy a little worried, but you are right, you worry, very good returns on capital, we are growing, you know, every time a cycle comes, obviously, it could affect the bank, but we will handle it well. that cycle just like we did during the last one, okay, when I think about it, I think you have to be there buying shares every day for the company that you have chosen, a reduced share buyback path, but I still can't.

I think how many shares you have over the last ten years, your share count is not going down enough, when will it start to get back to a level where it really isn't, where it's absorbing the gate supply? I don't remember exactly the number, but our participation drops by about 15 percent, yes, but we are doing six versus ten years ago, two, three, five and yes, yes, well, some have been issued over time, but since I have been It has been going down there, so, if I want to see something. I would rather spend that money, not buy back shares.

Doing this, so growing our business is much better for the economy right now, we don't have much of a choice, but over time I would really prefer not to buy back. stocks, you know, it would make sense for companies to do it. I also don't believe in this argument that it is bad to buy back shares is to simply return them to you, an investor who then redeploy them for better use of your redeployment of capital that should be redeployed if a company can't use it, but I always make my efforts to grow our business, which we are now doing well.

I have heard about branches, we are now in all major cities for investment banking, middle market banking etc., we have been growing abroad. but think about bankers and people and stuff like that so that's my 2p preppie now you invest in creating products and services so you'll see a lot more of that in the next 12 months when I think about this and I'm very I'm proud of what you're doing in my hometown, but I say, well, Apple, as a pure capitalist, you know, Jamie, we're shareholders, we should get that money. There is no real instant reward here in 2 or 3 years, it will take a long time. time, no, it's not true, I mean, first of all, you have to be careful with accounting, but when we build a branch, okay and we put an average, I don't know, we want to give the numbers publicly, we put capital in the branch , but five years.

Later, that branch could earn by contributing to profits of a million dollars a year, so you know, the schedule of those new cities is a little more complicated than opening a branch in the city we are in, but again already We serve 60 million homes. We want to serve 70 million, we want to get them to all the proxy service that we have so that there is a financial reward, it's just not overnight, but I don't worry about that. I just explained to people like you that VPN is fine. it's very good and it will be negative the first year, you know, maybe there will be glitches for the third year and then a plus, a plus for depositors at JPMorgan, we won't get the rate, when will you start paying more for your CD and your depositors? ? rates went down but they fell like that when the run was reduced to zero the banks didn't so the run started to go up they didn't broadcast it I think now you sleep escape other options money market funds etc. but I think now as that rates go up the next 25, the next 25, you'll see what we call beta, you know how much will be transferred, it will go up and up and up, well that's going to reduce the profitability, no, I wouldn't worry.

Not really because we're getting or earning deposits and the difference you keep between your cost of funds and your pain would be pretty much the same Jamie you're talking about with politics, just like politicians did in 1964. about a war against poverty, that companies seem to be doing a better job, you mentioned it in the big settlements of, say, 2013, when Associate Attorney General Tony West was after the bank, that was you, you're defensive, you're playing offense. and trying to change poverty in this country, can you do better in government? No, I think I feel you. I think government and business have to do it together and it works at the local level.

We see it in Detroit. in New Orleans we see it in Chicago we see it in Los Angeles you see it in Philadelphia with great ideas and most of the things you talk about affordable housing skills commercial development audre is not a Democrat he is a Republican but I think business and government together you can achieve it. We cannot do without business and business cannot do without government. You know the government is obviously going to play a role both in terms of regulation and licensing and things like that, and while the United States is the most prosperous nation on the planet, we really have to focus. on these issues about income inequality infrastructure opioid crisis lack of education in state schools end up in good jobs Jamie yes you know how you sound when you say these things you sound like a politician I'm apatriot, okay, but if you are a patriot so he's generalizing now we didn't know if there was a democrat republican friend who ran for president he was a world war ii patron well I'm a banker I'm not running I just think that it is very important that we have good policies and that we should focus on good policies and all the time and you know, as you know, I don't mind talking about good policies, analyze them and participate in a way that JP Morgan can, so if you are in other areas or others come They will do a better job than us, the camps, they have much more knowledge, but in these types of areas we can really help the communities.

They are good business skills, really transferable to government, although I think some are, I mean the organization of leadership, management and administration, but no. It doesn't mean that a CEO is going to translate into a good politician, you know, politicians have a whole different skill set and you know how to relate to people and understand empathy etc., but that doesn't mean I would never say that people They may or may not do something. have done it most don't say never say never again brings me back to the dial I would never say never for someone else I wouldn't say a CEO can't be a good president do you think it's too soon and President Trump?

He was a CEO, so he just met simple American professors in Philadelphia, that's something that, I'm not saying is frowned upon, but that wouldn't be credible ten years ago, when bankers were considered the antithesis of democracy, even because of what what President Obama has done. He changed enough that now you're welcoming communities that were solidly Democratic areas, Democratic areas that I think really hate bankers. It's nice to be welcomed, but just so you know, we never stop seeing mayors, governors, presidents, prime ministers, Senate, even people who didn't make it. We don't like each other because we always said it's not about whether you like us, whether we're doing a good job or what legitimate complaints we need to handle, what we need to do to make things better for people and that's why we never stop doing it, but it's nice. that has been done.

You know when people like, yeah, okay, I want to talk about the country. You've gone on record saying that we know that the best military education system, the best educational system, there is no best educator, the best and the worst, okay, we are failing the kids in inner city schools. half of them don't graduate like they do in the poor neighborhoods and a lot of kids don't get the skills they need to have a job, so it's a feeling like we should sound the alarm about that, but we don't and I don't know why. Well, I don't know what you can do beyond what you've already done, what we're doing with a huge amount of skills, so what we do in skills, we do in local schools, like we now work with Guttman in New York.

Train is my wife, by the way, she did this to train kids to be tellers $36,000 a year twelve thousand medical and pension benefits kids like jobs and that's the first step, then they can move up, they can become bankers and live on a lot. from our branch manager we are cashiers and a lot of the regional managers would tell us so we could do it ourselves but we also help the local schools well it's a high school it's apprenticeships whether it's a community college with money but It's not just us, it's all companies need jobs locally, they need special training so you really have to do it Logue Should be a national guy $1.5 trillion in student loans 23% default list you're supposed to be 40 percent by 2023 I know Marian Lake said Look, that's not really a problem for a bank, but what if for a country it's a big problem?

You know, we have lent to this old government, by the way, the loans should and the bad loans are bad. But it was the mortgages that you make or the businesses, one of the things you have to do is have discipline around capital to get a return. Bridges to nowhere are bad schools that don't work. Loans with money are bad. People camp. It's a mistake. So student Lenny was a tremendous amount of what's been done in the last seven years, people are having a hard time paying it back, it's all government property, so taxpayers are going to lose hundreds of billions of dollars, but it's not good because what?

What we are seeing today is that on other loans and mortgages these children are having difficulty obtaining a mortgage credit card. Difficulties in obtaining a credit card are affecting the economy. It's not like the mortgage crisis, it's a trillion three or a trillion four. No, it wouldn't cause harm, it's just funny because it's really very unfortunate. Okay, let's go back to international for a second. You talked about the idea of ​​tariffs until now. You know you have a skirmish, but at what point would it be one. war and at what point should we worry that it's really going overboard, you know, I'm worried about it and I just don't know, you know, I mean, I think China has been very predictable in retaliation and I think the market expected retaliation an eye for an eye.

I think they are waiting for NAFTA to be approved. It could get worse from here and I really don't know what I expect it to do. I hope they sit down and have rational conversations and We have a NAFTA that we should do like Canada, Mexico, good neighbors of ours. I'm going to Mexico later this week and with China and I don't know what the closed door talks are anymore, so I really don't know. yes I urge I think we should try to improve again the president raised very very very good issues we are just talking about the process they both came to their conclusion I hope their process works I just think it is a riskier way of the president said the problem with the banker Jamie Dimon running for president, she doesn't have the application that intelligence teaches her and there's a poor public speaker, a nervous mess that doesn't sound like cooperation, yes, but how did you fix that?

I mean, I'm sure in the last 10 days you fixed this. I haven't spoken to the president, yeah, so, but it's okay, I made a mistake. I shouldn't yell at Yap in that way that some of you were mentioned on TV, but I want to focus on politics, so my opinion is let's focus on politics. I shouldn't be taking photos and joking at anyone's expense. Do you think you would put this in the case of, say, the London whale, where you said it was the stupidest thing that moments and the most stupid and embarrassing situation I have ever been a part of, it lives up to the line and Well, no, no, I've said a lot of stupid things in my life, but London, well, we bought real money.

The things you say are common. -feeling things we haven't heard from bankers we've heard from bankers being on the defensive for a decade you're really saying this is how public-private partnerships make these neighborhoods better because the schools are so much better and we change our country, you change the city at six, you try, but again you have a lot of guests on TV, you ask most of them what they are doing, a lot of these companies are doing things like this, they are not just JP Morgan, but all these companies are part of the BRT and we actually published a brochure on job skills.

Everyone is doing something. Minh does a lot of diversity. Other things are lagging behind other countries we've seen. I think overall we are going backwards. I think the bad policy is the reason we've grown at 2% in the last 10 years and no more, and that 2% and American parks, you know, 20 percent growth in ten years is half than it should have been. China is going to approve this, I doubt it. It's okay, this country has been blessed with things that go far beyond schools and you reverse the good part. The university is land, water, energy, the land of the Pacific, they are the best companies, innovation, but we had to sit down to face a series of problems, we solved one. an uncompetitive tax system for businesses that was a bad idea we have to fix immigration inner city schools opioids we have the ability we have a job we have to get people back to job skills we should double the Federal Income Tax Credit Job and what it is It's time to have someone point out why and we should have a negative income tax of some kind to create jobs that people have because jobs give dignity, jobs have better social outcomes, but they should be a living wage, so I'm okay with that. concept when I hear from people and the Earned Income Tax Credit does that and we need to double it, we should double it and you have to pay more, whether it's Satya Nadella, the CEO of Microsoft, you've brought this group together Shantanu Narayan from Adobe Bill.

AP's McDermott Frankly, I've never seen anything like this and I've been doing this on air and in print for a while, over a trillion dollars in market capitalization represented by you three gentlemen sitting here and announcing the initiative Satya open data cloud, why is this so important? You know the knowledge that the three of us had based on the work we are doing with many clients. You know, today we talked about Coca-Cola, Unilever, Walmart as customers. We are all excited about this open data initiative, it was their real knowledge that led us to do this, and that is how we work to give them control of their own customer data, because that is the currency in which any brand relies. cares deeply about the continuous improvement of their own customer data as understanding and the coming together of the three of us will be essential for them to feel in control of their own customer data and the idea is that Microsoft with Azure Dynamics has a certain set of customer data held by Adobe. experienced cloud has a lot of marketing data, different types of data about the customer and how companies are trying to reach the customer.

The app has a lot of data and a lot of it has to do with what is happening. within the company that's affecting external customers as well, so what our customer will be able to do and maybe Bill, I'll throw this thing at them that they couldn't do before once they figure out this open data thing and they're able to read data in all of your platforms, John, there's not a CEO in the world that doesn't want to have a single view of their customer and have to connect their demand chain to their supply chain and do it in real time.

So if you think about the consumer who is social mobile, who is geospatial, who is always on the go, who will buy from different companies across all channels, direct-to-consumer wholesale, and you need to make sure that that connection point to that. The consumer is very intimate, so these companies have to be smart companies because more and more the self and predictive analytics are going to govern the way you interact with that customer, but ultimately what you have to do is deliver, so now you will see the demand. and the supply chain is fully integrated and that data will be shared evenly between our companies, so the customer is the main benefactor of the open data initiative that we announced today and Shantanu just announced that Adobe is buying Marketo, I think which were four. point seven five billion.

I'll try to ask you about that a few days before, you weren't ready to talk to me about it, but you can talk about it now, how does that move an experienced cloud and what are you trying to build? fit into this larger story, well, I think the three of us share this vision of how we enable companies to put customers at the front of the digital journey and Satya and Bill said that getting behavioral data, getting transactional data and getting customer engagement customer be the front. and center I think it's the most important thing companies can do to make digital actually a tailwind instead of a headwind.

What Marketo does is add to our experience cloud offerings the ability to create this unified profile for all customers and what every customer will tell you today is that they want an engaging experience with anyone they do business with. , whether financial services, automotive or retail, and Adobe focused much more on b2c customers, but with the same requirements that applied to b2c customers. They are now valid for b2b customers and that is what Marketo offers. In reality, it is a group of senior executives created as soon as possible who now already know the market or it is a closed party.

Amazon Google Salesforce is welcome to this initiative. How does it work from here now guys, you are very clear, but the name itself should say it all, it is an open data initiative, you, some technology, name all kinds of things. It's not about us here, it's about really unlocking the data which is our customers' data about theirs. clients, but I think the fundamental thing here is trust; In other words, ultimatelyUltimately, customers will decide and fulfilling their own customers' trust in them will also be very key because, if you think about it, one of the main considerations for everything related to customer data is privacy and regulation around privacy, so the most important thing here would be for each supplier to think about how they participate here and ensure that there is more trust throughout the value chain, from the end consumer to the brand and us as software. suppliers or you know technology companies, so I think depending on the business models, I think the real challenge is for some who really want to join, but their business model probably won't allow them to join as you think it will be more difficult. for an Amazon or a Google in you, you have to ask them, but I think, in general, what we have all anchored ourselves in is whether we can create an architecture, an incentive system that changes the course so that customers are in control from your own data, I think. the overall economy will be better now, so that's what we're trying to do.

If I can add to that for a second, I mean what we've already demonstrated by having a common taxonomy for this customer journey, that is, how a customer is defined. how demographics are defined how lifetime value is defined how your interests are defined we have actually agreed between companies even though we have some overlapping products in that space, I think it demonstrates our commitment to this open data initiative and The fact that you have customers excited about the idea of ​​building on the foundation that we have I think gives us a lot of confidence that this is the right thing for companies to bill how long do you think this will take?

To get the touch today is The specifics of this year's initiatives are that other companies can join. People understand what they have to do with their platforms and their software to comply. I think today's big announcement represents that the Microsoft Adobe NS application has already started this journey, so in terms of others who want to join the journey, we are happy to share the reference architecture around the ODI initiative. However, I think the big story here is trust and I think Satya and Shantanu said it very well. Think about Trust is the ultimate human currency. Think about customer experience being the most important priority think about the power of getting people inside these companies to focus clearly on what's happening outside of these companies this idea of ​​the net present value of a more satisfied and loyal customer, plus If making employees more inspired and more loyal is probably the biggest value driver we can ever think of, let me think about this: a 5% improvement in retention equals a 95% improvement in profits for most of companies, so if we can connect that data to their consumers and provide them with an unimaginably good experience, what effect will that have on the revenues and profits of all the companies we care about?

It's a breakthrough. Ok, we're talking about flexibility, we're talking about efficiency and context. Here we have a UN. At the General Assembly meeting, we have something to do with the Deputy Attorney General in Washington, maybe a change is happening there, we have a trade war between the US and China and arguably that is not the only what is happening, to what extent is politics taking place? an impact on product demand your ability to project what demand will be in the market these days or how business continues as usual. I mean what we at least see thanks in part to the industry in which we participate.

In this digital technology is becoming more and more ubiquitous in all parts of the world in all sectors of the economy and therefore I think it is up to us as a technology industry to ensure that these companies are creating opportunities in all sectors. economies and in all societies, because if you think about it, politics will always be associated with what is the well-being of any region, any community in any country and as long as technology can play a role in the ultimate success in creating surpluses that are distributed Equitably, I think these changes in the short term.

Obstacles will work, but to me that's what I think is that we have a real opportunity that we are obviously taking advantage of, but we also have a responsibility to make sure that the technologies benefit a broad spectrum and bill a German company technically. How can you not be a US-based company at this time when there is a lot of trade tension between the US and Europe between the US and many different countries in Asia? How does that affect the way people see sa P when they are? Looking to get involved with technology and develop your business well, we obviously consider ourselves a truly global software company.

I think it's a very important distinction; However, there is no doubt that tensions between, for example, some Asian countries in the United States are quite high at the moment and probably less so for a German company if you think about where the headquarters might be located, but in all seriousness , I think we are focused on holding all technology leaders accountable for wanting things to work between them. countries and technology companies and right now I think we would all benefit greatly from an environment where we stay focused on growth and to me, open countries are prosperous countries and if you look at the history of the world, every time a country has been open is In reality, it equals more trade, more opportunities for everyone, so we live up to that principle, but there is no doubt that in the ASEAN countries in particular I see a new strength in our business model.

Shantanu. It seems to me that we are entering a new era in the cloud where more Mergers and acquisitions, more partnerships and initiatives like this, how do you see the market? Because it seems like for a while big companies like yourselves were putting off doing a lot of M&A because things were expensive, but your values ​​also went up and it seems like your pace of M&A has picked up a little bit. What's your take on the M&A market right now? First, I think you know that the three of us were early adopters of the cloud and recognized the benefits of the faster innovation we could do in the cloud. of the trust and security that comes from all this data being in the cloud, but I think we look at it and say to really solve fundamental customer problems, we put the onus of integration on the customers to work with various small companies. it's just not going to work and that's where I think what we're trying to do without saying if the leaders in our categories can come together and make it work, that's going to be extremely enabling for companies that do it, so I think we'll see more consolidation as a result of IT professionals not wanting to integrate small systems but rather rely on large companies that are innovating at a rapid pace and you feel the same.

Yeah, I mean, I think one of the things we're really doing is reducing friction and improving agility. One of the interesting things that Bill mentioned was, for example, the ASEAN region, if you look at cloud AI and the open data initiative, the idea that even a small business in Indonesia can now use sa P Adobe and Microsoft becoming much more efficient is the real opportunity, so they are breaking down that barrier to be able to use the latest and greatest technology for every business in every part of the world by truly working together. It's easy to get started. easy to take data from one place to another easy to use AI to reason about it and create new experiences and it is surprising that in a sense we are commoditizing technology as an input to drive business and at ma we expect to see an increase pace I think First of all, if you look at all of our R&D budgets, I think most people obviously gravitate toward M&A, but the organic investments that each of us are making are by far the most large, of course, we will supplement that supplement. with mergers and acquisitions where it makes sense, but I think what you're really seeing is growth across all of our businesses driven by fundamentally organic growth.

Well, it's an extraordinary moment to have the three of you sitting here talking about this open data initiative, Satya. Nadella, thanks for putting it all together Shawn - Narayan from Adobe bill McDermott frame/s ap thanks heavens in New York, back to you, the market has been by virtue of the fact that we've had this record run, the Dow joins the Tras After last week's record move, the market has been able to ignore almost everything coming out of Washington, so how does this factor into today's calculation for investors? I think today's event itself probably won't play a big role, I think.

Washington's biggest risk is basically trade escalation and the potential for tariff implementation. We have already seen some and need to see what happens as far as 2019 is concerned as metals have been exceptionally strong when looking at stocks. an extremely healthy buyback trade that also continues to support the market along with valuations that are in no way overstated so we think it has good context, basically we need to see what happens with the tariffs because those are a risk to the 2019 numbers , the market was already going to go down today as a result of these reports that China canceled the meeting over trade issues, so we lowered that leg as I said in the Rosenstein headlines, but it's been notable that the market hasn't cared much either. trade. for more than a few hours or a day, I mean, when you look at the earnings, the earnings so far haven't really been, there hasn't been any material impact in terms of results and earnings, so far companies are starting to talk . more and more about the risk around tariffs, but again, no impact on earnings so far.

I think that's a risk that we're basically paying a lot of attention to for 2019 and that's where I think we're seeing that a market has been pretty resilient, so so far, they're not working on their models trying to take into account what's going on. in the midterm elections, it's only six weeks away, it's very difficult, I mean, look, phase one on tariffs has been implemented, part of phase two has been implemented, a discussion on Phase three has clearly gone through the numbers for 2019, we think that will be reduced by at least five dollars in terms of EPS, if possible up to ten, but again, it is very difficult to distinguish between what is reality and what is basically noise, yeah, well, let's get the midterm elections that's not noise, I mean, it's the reality of what's going to happen, the outcome is still unknown at this point, Lindsey, so how do you take everything into account?

Yes, it is definitely difficult to take into account, you usually see volatility increase significantly in the third quarter, before the midterm elections, they usually increase by 34%. We haven't seen that this year, looking at a lot of the different polls that are out there, it looks like the Democrats are going to take over the chamber, which would only result in more gridlock within Congress. which does not bode well for growth and the market in the future. I don't know what could be negative about the stalemate in the White House or in Washington, what could they do? We have the tax plan there, yes.

We have the economy going, you know, full steam ahead, so why would stagnation be a negative? Do you know what I said wrong? I don't want to say that it will be negative, what I really mean is that you won't see any growth policy that is really pushed, there will only be infighting, not much will be done and you are right, the market generally works well when there is stagnation in the market. I just don't expect the numbers to increase if the same stagnation exists, it's good. true, yes, of course, and I and I think that the way Congress is positioned now and the way the elections are anticipated to go, which is the House with the Democrats and the Senate with the Republicans, that could change , but even if that happens we have the growth policies in place, we have regulations that have been cut, we have a fiscal plan going forward, so I don't see what the problem is with that, I think stagnation would be fine in terms of what happens With Rosen Stein in the future, I don't see the problems there for me either, maybe this is the smoking gun that allows Trump to go after Jeff Sessions and say he worked for you, you should have known, you should have kept him in check even. so although I think it is a momentary sell off in the market, but the market continues, I am with you, I am more worried about inflation, we are seeing used car prices going up while oil is not part of the core, Still the impact of higher pricesEnergy influences all commodities, so that's my biggest concern, so the market seems to be taking it easy on a ten-year window of 3.10, about three points.

From Bravo, their end-of-year goals are 3,000, we are not that far from that level. As we speak, at what point does it start to become a little more bullish? Is there a search for performance until the end of the year? Are you comforted knowing that these high-growth sectors that have fueled much of this rally have taken what seems to be a bit of a backseat, these value stocks that should be rising in what is a very strong economy are finally at the height of the tariffs. Industrial stocks are performing very well, so we've had this price target for almost a year now and I've had to defend it on many different occasions earlier this year where there was a lot of volatility.

The market remains quite resilient. I think actually the market probably would have already been above 3000 if it weren't for the trade and the trade escalation and an old discussion about Terra, so for us again we're looking at 2019 right now, if you look at the consensus , implies growth of around 10%, we think 11 percent is something that can be achieved, but again, that depends a lot on what happens with tariffs if we think. When things start to converge, you get some kind of resolution. I would say that the market can probably move forward at the same pace with earnings for next year, maybe five to ten percent, but if Terrance is implemented, then I think we may have to take a pause. inflation and Steve is right in identifying that, I think what you're seeing right now in the U.S. 10 years from now we'll see a move toward three and a quarter percent.

I also think when you look at energy right now, I think the street is underinvested when it comes to energy oil prices, you have Brent above $80 right now. Brent crude oil will trend higher and higher for the rest of the year. Get to know me personally. I am increasing my exposure to energy. I think the trend sends there, but I think there's a little bit for everyone on a day like today. yes, you have some of the value names that you've been closing the gap between growth and value over the last few weeks and if you look at the market, equal weight versus cap weight, okay, equal weight is slightly outperforming, but in a There's a little bit for everyone today, so you've seen the tech names come back a little bit today, they're outperforming some of these text-oriented stocks and they're still on track for their worst month since March, but but the question is: do they exhaust the the movement that we've seen without technology coming back happened before, listen, it happened before again, so in July and August it may have borrowed a little bit from September.

I don't think that will change the general trend of technology itself. On Friday, you understand this. communication services sector, so talking to a lot of hedge fund managers this weekend they are going to lose Google they are going to lose Facebook they are going to lose TripAdvisor they are going to baba is going to enter the consumer discretionary sector a lot more investments in how a lot more Josh, can the market go up from here without technology joining in? Join me. Well, we have shown that it is not necessary. This quarter, healthcare is up almost 12% and industrials are up 11% and we hit new all-time highs in the Dow Jones. last week a new record was reached in the SP on several occasions, so it has already shown that you can have the best leading sector for three years, take a break and other sectors, as long as the earnings context is strong and the market itself is stable. can take the lead and can take the index to new high levels.

Listen to retailers at multi-year highs telling you all-time highs. Who would have thought that was possible going back to your recent December January? So yeah, it would be great if Amazon wasn't. There was a nine percent discount on the tie and Netflix was making new highs every day and Apple was holding new high-profile events overseas. Do you expect a rebound? I'm making it clear that it's okay if it's not in person. I think it's the most important launch of all. The stock market right now is alphabet, technically the setup here, I think if you get this probably 20 or 25 points higher, where really no one is down on this stock, significantly outperforming Facebook amid this technology downturn. large cap, the alphabet is the name, but put that. idea apart from the big picture idea and I think this was mentioned before, actually, the stagnation will be phenomenal.

The American public said in the Gallup poll recently that they prefer Republicans to be included and that they want to control this president right now, even if they are Republicans. It's number one, number two, if you go back to 1950, the stock market does the third best when you have a Republican in the White House and a Democratic-controlled chamber of Congress, it's not the best case scenario, but is the Third, that's not a negative, but that's why we ask our experts questions about the political calculus if Rosenstein really gets fired and what the outcome might be if that could swing the outcome at all American schools or the dramatic midterm elections.

That's a very good question if it were If you had asked me in December what the biggest risk to the stock market is, I wouldn't have said recession or profits or anything from oil or anything like that, the dollar. I would have said an exogenous shock caused by something in Washington where we go to Massive Saturday Night Mass Mass and everyone loses confidence in the US stock market at once. I no longer think that's the case because I think the market now expects some version of impeachment proceedings. All this does not say that it will be successful.

I'm not saying Trump is in trouble, I'm just saying the market now expects this to be the base case that we're going to have a cruel policy, maybe Jimmy, the exogenous shock is the Democrats taking both chambers and I mean, at some point moment, when I have carpentry workshop tomorrow, I think that would be a shock, it's only six weeks away. Don't forget that's not where all those why questions will be asked because it's very unexpected, I mean, and I'm sure that They also do their surveys. Everyone hopes for a Democratic House and a Republican Senate or elects a Republican Senate if you go through impeachment in the sense that in that scenario you have to stop at the Senate, if it's Republican, it's not going anywhere if it's Democrat, then really You have to think about the research, although let me because the big question here is what the market has. discounted at least that's the big question for me, we have a divergence here that tells us that the market is pricing in a lot of bad things, what is that divergence?

You have incredible earnings, okay, the last two quarters' earnings just blew the lid off the ball and expectations continue to rise. You mentioned that in terms of five to ten percent growth at this point in the cycle, five to ten percent year-over-year growth is incredible, but the multiple has contracted two turns since the beginning of the year. the way the markets say I don't know if they are tariffs I don't know if it's an impeachment I don't know if it's in force, you would think that the marketing that is there and what they generate in the... you think that the market has set the price at the worst of the tariffs yes no you think the market has wait let me get the punchline here okay whatever if it's discounted on all the tariffs they're not joe okay it's discounted on bad news that's why we're ...it turns out not, what's wrong?

We're never going to be done, buddy, the mole was hired because rates went up slowly and briefly, but they had the performance in the year, e-excuse me, Illinois, it's been over 10 years since they went up and as a result, yeah, you shouldn't. you have a booming stock market you have big profits tempered by the fact that money isn't as cheap as it was well so it's not rocket science wait a second it's never just one thing so don't say that It's mainly one thing, no. It's not, it's not, and by the way, earnings season is coming up, there have been no prior announcements, okay, it seems like that's basically it, now feel free to make your point, but let's make them listen then.

I'll just summarize, look. We are preparing for another good earnings season for the third time in a row. What will be fulfilled? We will have expectations that earnings will continue to rise and multiples will contract. I don't think so, it is more likely at this stage of the cycle that multiples will start to pick up. but we have a big disagreement on the desk as to whether the tariffs are fully discounted, they are not President, this time last week I was talking about there was going to be a trilateral agreement between Mexico, Canada and the US and it's That's why the market recovered, we haven't done that so far and I think when it comes to what's happening with the Chinese, further implementation of these tariffs drives up prices, that's a problem for the American consumer, It's a problem for American corporations and it's an inflationary impact but the market has no autonomy clearly the market doesn't think it's going to be that punitive making 100 at this point absolutely I said I disagree I think what's discounted right now is a favorable outcome at some point.

Can I go back to your point before the announcement? Look, I don't agree. The facts said that I published an article last week saying that it has been the highest percentage of negative pre-announcements since the first quarter of 2016, but you really can't have it. Either way you can't say how much is discounted into the market, but the strong earnings that everyone has been talking about and uniformly agree will come this quarter are not well discounted, that's the point at which expectations are extremely high heading into the third quarter. Because we have had such good numbers in the first and second quarters, expectations are high heading into the third quarter.

You just saw the confidence from the CEO Business Roundtable today. CEOs are worried about tariffs. You heard about it. They said it. So far it has only impacted about 10 percent of their revenue. Micron mentioned it. We're going to hear this word on conference calls significantly in the third quarter. You don't even need to wait for the conference. Macy's Office Depot. The list could go on. Are they all there? Hilo Smith and I that, so I think you guys, after couples, look like CEO, so do one of two things, you're not going to say, hey, Trump is doing the wrong thing, well, you're going to voice it and say, hey, We will be more cautious in the future. because costs increased to their point, we had the last quarter of the quarter before those big profits without the tariff problems and what the markets do after the quarterly announcements, what they did, what you did, you are right and Then I want to congratulate you. fish on his last time and also you have to use the numbers here two hundred billion tariffs of ten percent twenty billion dollars a year on the sp500 I don't think it's going to show up I understand the concern about inflation so I'm not saying it's not There, I'm saying it's small and it's on the market, that's what I'm saying.

I wonder if the worst tariffs are here. I listened a year, but you suggested yes, I did. I will keep it. We're at half of what the maximum possible tariffs are reduced, if we don't play, if you get 25 percent on another, you add another sixty-seven, okay, you're right, I'm assuming the rationality that you have against you now. You have the arbitrator on you, tell me that if we continue playing I will see your two hundred billion and I will raise another fifty billion, that will be a problem for the market in the year 2000. No, I think the tariffs are partial.

I don't believe it at all. I think if you move to Phase Three, I mean, first of all, I think if they implement 25 percent in phase two, that in itself will probably reduce some of the numbers by nineteen, which I don't think. I think it's totally discounted. I think it partially is. I think the multiple is a function of rates in full agreement. However, I think trading is also something that limits the multiple rerating, perhaps not by 2x, but by 1x. Which I just want to mention very quickly. I totally agree with stagnation. I think it's positive because outside of DC last year you had a pro-growth agenda, this year you have an anti-growth one, so there's stagnation.

I think the market likes that. I ask you: this market has been driven by buybacks, if CEOs sense a slowdown in growth, do you think they will continue to see the aggressive nature of buybacks that we have seen over the last two years? even more so, if that is whatneed to increase profits, they would double their bet because there are no cuts, there is no indication that they are seeing this control. We had Jamie Dimon, the CEO of JPMorgan, just moments ago with our own Jim Cramer. is an exclusive interview from CNBC in Philadelphia, here's what he had to say about the state of the economy.

United States, the economy is pretty strong and it's growing at 3%, it's been doing that for a couple of quarters and it seems like that way there are no big bumps, so let me continue, no indication Jamie Dimon sees a lot of things in the things that he looks at that we are going to have that slowdown that you say, well, if we have a slowdown, companies will maybe buy a little less of their shares. back I think the big risk is tariffs and the impact on margins. I think when you look at the economy you're basically looking at employment, which is very strong, you're finally seeing some wage inflation which is basically helping consumers and In fact, there's one thing that if you look at the second quarter guidance, like the most companies, we're actually talking about consumer strength, so again, I don't think the earnings outlook is III, I don't think it's that clear that you know expectations have risen, but I don't think they're extreme. , the terrace is negative, but on the other hand, I think you have an economist, what is the opinion of the house on the ten years and quitting smoking and just the premium and how It has become small and what do you think would really affect the stock prices if not?

You know, if we're really not going to worry about the curve, then what would we worry about? I'm glad you asked some questions because my next question for you was going to be that we've spent, you know, 22 minutes here and we've talked about all of these potential inflation risks. I get it, but the word that the Fed hasn't even been mentioned yet, they will be front and center this week. How wild card is that and does it fit perfectly with Josh's question? Yes, so look at the Fed's rate hike. I think it's a gradual negative effect, it's eating into margins slowly, but we estimate margins, for example, when we look at earned profit margins.

It won't be fully affected until the Fed raises another at least fifty two hundred bits if you look at interest expenses and debt levels I think the multiple is a function of yield so again if the Yields go up, say north of three and a half, three and three. -Quarters I think this becomes a problem, but first let's get back to that. I would say our view of the house is probably more in line with three and a quarter or three and a half now, US pension funds pension funds corporate pension funds government pension funds are just insatiable buyers of U.S. bonds.

Treasury, they are becoming very important in private equity and therefore to counter that illiquidity is a bar, on the other side they are going crazy with Troy, which I think This is the reason for this narrowing of the spread and not an economic concern. Would you agree with that? Yeah, I've had a lot of PMs basically tell me acid alligators, tell me 10 year yield at three percent, that's a buying opportunity for everyone, yeah, huge. swimming pools because when you look at what is happening abroad when Germany Japan is so where do you think the question I asked the people whose answer no one knows the answer to because we are interested in the environment is where do you see the restrictive policy Now what used to be? clearly more than 5% that could still be there there is no where it is I would say probably three and three quarters 4% anything above that I think it becomes restrictive unless new reasons emerge to suggest that growth will accelerate, but no Do you know what the expectations of your sector are: which one would you recommend at this time?

They are the three best places to be in the market. We have been promoting a bar portfolio in recent months. I'm using the same same term here, basically, moving on. I like the technology because we believe that in the late cycle it will not be exposed to growth, people pay a premium for gross car care, but at the same time, given how extreme the levels of dislocation in the market have become, we say that they do not remain naked. the value side has value anchors, we like financials with industrials, we like energy, but I guess the reason I asked the question is by virtue of the fact that it has those sectors, technology, financials, industrials , energetic, cyclical growth, you can't worry.

Above all that, no we are not, we believe that the ugly business economic cycle is intact and not just in the US but globally again. I keep mentioning that tariffs and trade escalation are my biggest concern for 2019 in terms of whether we move sideways or not. We're potentially up 10% when we look at emerging markets relative to where they are compared to the US, we think it's a big long-term opportunity, so we think emerging markets are becoming more and more of a very attractive opportunity risk. The reward is quite attractive. The positioning is very negative. The feeling is very negative.

I'm with you on this China issue. I mean, it's basically in recession territory. When you look at the gap between the US and China, we think there are a lot of interesting buying opportunities. It's very difficult to find the catalysts and time the catalyst, but again, six months on a 12-month view, we think I definitely am. I think the risk in that trade is good, you get more reward, but a lot more has to go right for you to get the reward. now I disagree, we actually worked on this a lot recently, we had some questions from clients, it turns out that when you buy emerging markets like Anand as scepter as an asset class after a 20% drop, the CNBC exclusive, hello from again, Jeff, thank you very much.

Karl, yes, we're here with Jamie Dimon Jamie, this is a great commitment to an area that, frankly, has gone from a bank to an unbanked city that has just retired over the course of the last five years. 15 million dollars in a network. 330 banks have closed in the last 10 years, why not? Yeah, well, you know, with regulatory reform and tax reform where you now say 20 billion dollars is going to a lot of cities, obviously Philadelphia is the seventh largest brand in the United States, that doesn't include its largest suburb called New York and you know, and we like to be part of a community where we are already here in investment banking, commercial banking and private banking, retail is a gap, so we will open 50 branches, 20 percent will be in LMI neighborhoods, neighborhoods like this and when we come in, bring the full force of JP Morgan, which is philanthropy dollars, but to really help people like business owners, it funds affordable housing units and we enjoy it, it's good for business and, over time, we invest for the long term, we never achieve it.

There was some talk about the multiplier effect and when you open a branch people think you know what, we don't need branches anymore, everything is digital, yes, but giving them more work is incredible, so I think people are not thinking clearly. One million people visited the branches. every day the type of branch will change the size of that branch may change they are getting smaller but there are more councils so there is a mortgage loan office there there is a small business loan officer there is a financial advisor but your financial matters that will change, but a million people, even the average millennial, visit something like three times a quarter, so to me the question of brands is no longer forgotten will change, but you still need to serve your customer the way you he wants to be served, not the way I want to serve him.

As you know, we have implemented all these new products as well, like finding the bank well online only. They mention this because a lot of people feel like ten years ago one of the problems was education, the borrower, the child or didn't know enough about what to do, you said there was literally someone there to help and teach, yeah, well, that . make a difference compared to 10 years ago, yes, I told people here that when you go to these LMI neighborhoods try something special, but we will implement a lot of financial education tools, we will make them invest, we will implement an advisory group and we have not yet decided the price so that you can advise and think, we already put on the screen that you can get your FICO score and we will teach you ways and what you can improve your FICO so that you can reduce costs, a bar and things like that, we have to do a better job , not just us, but the United States, educating people on financial matters, from emergency funds to handling, you know, retirement accounting, so we're making it so we especially have to do that now, it's just We have things which we hope our customers enjoy.

Let's talk about the power of business versus the power of government. The government legendarily got big deals from different banks. 13 billion dollars from you. Yes, Keith Blood says you paid a total of 44 billion. Did that? the money goes to the community and that was the way you do things versus the specific way you're doing it right, there's actually this UPS community. I mean, some of those funds we don't really know how they were disbursed and I think one day someone who looks at that and that kind of past, we've moved forward on how we do it for you, but that's how you build a community, small businesses that lend affordable housing branches and they advise people, and we know that works in cities, you know.

This city, Philadelphia, his great hometown. I think the city is doing better and better, but it is divided or not, so we make a special effort in those parts of that city. There is now a sense that lending nationwide is slowing. If you're not getting that from your bank, can you give us a sense of what's happening in places that are frankly unbanked and whether there's a resurgence that could really move the needle for you? One of the important things is that these things work when you do it with civil society and government they are okay, they don't work, we are together, so we have seen it around the world when mayors, non-profit companies work together , you can get people jobs, you put them on a train to get them jobs and it actually works, but in the United States, the economy is quite strong and it's growing at 3%, it's been that way for a couple of quarters and it seems that way way there are no big bumps, so let me go ahead and lend it. there is a small reduction in lending in the middle market, we don't know exactly why large corporations, of course, public market bonds could fall short for customers.

I think you know. We know that there is an effect that through tax reform and corporations earn the money they need. borrow less, it's hard to understand, ease it, but that really means, but if you look closely at job growth, people going back to work, it's pretty good, you told CNBC last week it's not, it's not you call an exchange. war call it a trade skirmish previously you have said that sometimes there could be a slowdown or at least in the psyche due to any type of trade war what do you think of the twenty billion dollars of tariffs themselves?

They are a bit of an attack if everyone gets paid they are attacks on America, a lot of people do other things well, they have other supply lines, but it is a twenty trillion dollar economy, so that is a negative, the real negative is not that. it is the consistency of trust, if people start to reduce investment, people start to move supply chains, what we have seen already moves the market a little and therefore the fear that the skirmish will become in a war, so we don't really think it's a good way. To go wrong, they could have easily said some of the benefits they have seen from regulatory reform and tax reform.

I want you to talk about regular for me, yes. Marion Lake recently told a fabulous CFO that we haven't really seen genuine regulation that would make her happy, but there has been so much that there has been a change in attitude, no, yes, so I think that if when I travel, CEOs from other industries, logistics, steel pipe manufacturing, everyone has seen it, have we seen real changes in regulation for us, not really? There is a long list of things they want to do. There have been regulatory changes for the smaller banks that we fully support to make it a little easier for them to reduce burning them, but it had nothing to do with the larger banks.

I think what I'm talking about is the public, you know, we're not calling for Dodd-Frank to be eliminated, we're just people, so we're looking to calibrate, get rid of duplication, look at things that hurt the mortgage markets or this type of market. couldimprove growth and do it safely, no one is looking, you know, going back to the old days, just recalibrating, remember there were two thousand rules, it was like one or two were a lot and they were done in a hurry and people show that is reckless and look. cost-benefit you know what makes sense what doesn't keeps the system safer remember growth a stronger economy also makes the financial system safer now that you just mentioned there are no bumps in rates we have a Reserve meeting Federal coming up this week that you would intend to use the typical logic that people say that means you can't make that much money and if we can't lend that much, then I'm going to say there are no bumps, homes in good shape. , people are going to go back to work fight, clients say those are good flage companies, tax reform is still a benefit, we don't have the extreme leverage that we didn't have Oh 8 and all the loans have been pretty good, good good loans, so what hasn't been billed but absolutely there is friction out there there is always friction you open a newspaper any week of any month there are tons of friction and it is rising brexit QE Turkey Argentina oh and we don't know the full effect of those things so yeah we keep our eyes on that, but it may not derail the economy, you'll see separate the two.

I still think these are all things that should contribute to the strength of your balance sheet. We have not seen that we have European banks that are really fleeing, so to talk about why JPMorgan is not making better presidents given the weakness of the rest of the world, well, we are in all countries and we are constantly growing and we do it country by country, plus bankers, systems, people and all the support, risk, legal credit compliance. So our involvement in Europe has increased considerably and we're just doing to add people and add branches and you know, the basics, man, three yards and a cloud of dust.

Well, when I hear there are three of us, I think you should get a higher price. vulnerable dirt for Evans sake you're selling it 12 times next bookings we've been in this game a long time if we're your financial growth with the money made every day you open the door why don't you get valued as? is a flower tea company, that is a question you will have to answer, so your banks are still under political regulatory restrictions and all that we just went through the crisis. I think a lot of investors always buy a little worried, but you're right, worrying, very good returns on capital, we are growing, you know, every time a cycle happens, obviously it could affect the bank, but we will manage it during that cycle just like we did it during the last one.

Okay, when I think about it. I think you should be out there buying stock every day for the company you've chosen. A share buyback path is strident, but I still own many shares you've held for the past ten years. Your share count is not going down enough. When will you start getting them? Go back to a level where you're not really absorbing the door supply. I don't remember the exact number, but our participation is down like 15 percent, yes, but we are doing six versus ten years ago, two, three, five, yes, yes, well. there have been a few issued over time, but since I've been there it's been going down, so if you want to see something, I would rather spend that money without buying back shares, doing this, so growing our business is much better for the economy .

Right now we don't have much choice, but over time I would really prefer not to buy back shares. You know, it would make sense for companies to do it. I also don't believe in this argument that it's bad, buying back shares is just donating them. Back to you, an investor who then redeploys to make better use of your redeployed capital that should be redeployed if a company can't use it, but mine, always to grow our business, which we are now doing well. Now we have 500 branches. in all the major cities for investment banking, middle market banking etc. we have been growing overseas but think about bankers and people and stuff like that so that's my 2p preppie, it doesn't invest in products and construction services, so you'll see a lot more.

For that, the next 12 months, when I think about this, I'm very proud of what you're doing in my hometown, but I say, "Okay, Apple is pure capitalist." You know, Jamie, we're shareholders, we should get this. money, there is no real instant payment here within two or three years, it will take a long time, no, it is not true. I mean, first of all, you have to be careful with accounting, but when we build a branch, it's okay and we give it meaning. I do not do it. We know we want to give the numbers publicly, we put capital into the branch, but five years later that branch could be earning by contributing a million dollars a year to profits, so you know, the timeline for those new cities is a little bit longer. complicated than what we opened. a branch to see where we are, but again we already serve 60 million households, we want to serve 70 million, we want to take them to all the proxy services that we have, so there is a financial reward, it just doesn't overnight in the morning, but don't worry about it.

I just explained to people like you that okay, the NPV is very good and it will be negative the first year, you know, maybe there will be failures in the third year and then an upside, that's a spa for JPMorgan depositors, no we are. getting the rate you will get in two years, when will you start paying more for your CD and your depositors? When rates went down, it went down like that when Carrera went down 2-0, the banks didn't, so Carrera started going up, they didn't pass it. I think now you're asleep, you get away, other options, money market funds, etc., but I think now as rates go up, the next 25, the next 25, you're going to see what we call beta, do you know how much? it will be transmitted, it will go up and up and up, well that's going to reduce profitability, no, I wouldn't worry about it, no, actually, because we are getting or earning deposits and the spread that it maintains between its cost of funds. and your pain would be pretty much the same Jamie, you're talking about the Politan just like the politicians did in 1964, you're talking about a war on poverty, businesses seem to be doing a better job, you mentioned it in the big settlements of, say , 2013, when Deputy Attorney General Tony West was behind the bench.

Are you defensive? You're playing offense and trying to change poverty in this country. Do you feel you can do better in government? No, I think I'm sorry. you think the government and busy